Fitness chain Planet Fitness is the IBD Stock of the Day. Planet Fitness stock is currently in a base, when viewed on a weekly chart.
The setup arrives as the economy reopens and more people return to gyms, after months of Covid-related restrictions in some areas. On Thursday, Planet Fitness reports fourth-quarter earnings — potentially offering a catalyst for a big move in the stock price.
Planet Fitness Stock
Planet Fitness stock fell 1.6% to 91.20 in the stock market today. On a weekly chart, shares are in a cup base with a 97.43 buy point, formed after a prior failed breakout.
When a base forms on a daily chart, PLNT stock could have a handle buy point of 97.14. The relative strength line currently stands at an 11-month high and already at the best levels of its consolidation. The RS line, the blue line in the chart provided, tracks a stock's performance vs. the S&P 500 index.
Planet Fitness stock has a strong 94 Composite Rating. Its EPS Rating is 71.
Planet Fitness stock has risen around 10% over the past year. The gains run contrary to exercise-bike maker Peloton, whose stock boomed in the era of pandemic-related lockdowns but has slid 77% over the past 12 months as demand shriveled. PTON stock surged in early February on buyout buzz, but with nothing materializing, shares have given up much of those gains.
'Covid Fatigue'
Planet Fitness stock analysts expect the chain to earn 26 cents per share during the fourth quarter, a 53% gain, according to FactSet. Revenue is seen increasing 33% to $178 million. Wall Street forecasts same-store sales will jump 14.1%.
William Blair analysts, in a research note this month, noted that Planet Fitness had announced a 200,000 sequential gain in memberships for the fourth quarter, to 15.2 million. The figure, while still slightly below pre-pandemic levels, was better than expected, the analysts said.
Planet Fitness stock was initially hit hard in 2020, as lockdowns began. But management, during a conference last month, said that the omicron variant's impact appeared to be muted though the fourth quarter.
"We didn't see any negative sentiment or negative reaction to member workouts or member joins or cancellations for that matter," CEO Chris Rondeau said then.
He said that people were suffering from "Covid fatigue," adding that increased vaccinations had helped put more people at ease with working out in gyms, even as omicron cases surged earlier this year.
"I think that's one big thing that people realize — that fitness is truly essential and important," he continued. "And I think that's a tailwind ... coming out Covid for the next few years."
With Covid cases, hospitalizations and deaths falling sharply, more and more states are removing indoor mask requirements. That could provide a further boost to reopening plays such as Planet Fitness.
