According to a recent article from, the gym industry is eyeing continued growth especially the large firm, Planet Fitness. Analysts have stated that the cardio drive, supportive atmosphere has positioned itself to open more locations and increase their market share. What makes them so attractive is their low-cost positioning, high number of franchises and consistent revenue retentions.planet fitness gym

Optimistically, Credit Suisse analysts have pegged Planet Fitness as a bull to watch with a target price of $19. This comes from its current 7.1 million active members it has on file, a number that shows intentions of growing. Others are projecting a $22 target with a 20% annual growth rate.

With a culture of health and fitness growing around the country, the value proposition towards customers plays directly to new and seasoned gym goers. By having a “lunk alarm” in their gym, a siren that goes off if someone slams weights or draws attention to themselves, they have created an atmosphere of non intimidations. They refer to it as, “No Gymtimidation”. For the new gym members who may not be confident about their body image, this is a perfect safe area for them. When you couple that with the low cost, month to month rate ($20), Planet Fitness is one of the most valuable offers on the market.

Current gym count has around 1,000 stores on file, with commitments from franchisees to open another 1,000 and projections to reach the 4,000 mark in the future. Analyst say their growth comes from a deep routed franchise structure which attracts motivated franchisees. The breakeven timeline for a franchisee is about 4 years after opening, or less. The steady revenue numbers come from the combination of dues, annual fees, vendor commissions and royalties.

All indications are pointing towards stock performance well through 2017. Solid historic data supports this projection from the fact that Planet Fitness has not closed a franchise due to underperformance financially or loan default. Look for fitness to continue to gain steam in our culture of health and in the market by way of Planet Fitness.

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