Stifel analysts said Wednesday they are confident about their buy rating on Planet Fitness Inc.’s stock PLNT after hosting senior management for meetings that discussed the company’s three-year development targets, membership trends, new unit economics and click-to-cancel implications. The latter is currently being tested in Tennessee, where a December law allows anyone with a subscription to click and cancel it, irrespective of when or how they signed up. Other states are only allowing individuals to do that who joined after the law passed or who signed up online. “Management did not seem overly concerned with the TN results,” wrote Stifel analysts Chris O’Cull and Patrick Johnson, even though an initial spike in cancellations has normalized more slowly than in other states. “Management remains confident in sustaining strong membership growth and its 600-unit 2023-2025 development guidance,” the analysts wrote. “Overall, we remain confident in our Buy thesis—a dominant category leader with a strong customer value proposition positioned to gain market share.”: Even if the company were to miss its expansion targets by 10% in the next three years, Stifel estimates that would equate to just 15 cents in lost earnings. The stock has fallen 10% in the year to date, while the S&P 500 SPX has gained 11%.
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