When looking at a company there is the obvious of looking at the financials and the direction of where the company is headed. Many times people get caught up in that part and fail to look at the large picture. An example is that the fitness industry has a large influx of revenue in the first quarter, which is due mostly to people joining for their new years resolution.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Planet Fitness income statement, its balance sheet, and the statement of cash flows. Potential Planet Fitness investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Planet Fitness investors may use each financial statement separately, they are all related. The changes in Planet Fitness's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Planet Fitness's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Planet Fitness
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Planet Fitness performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Planet Fitness shares is the value that is considered the true value of the share. If
the intrinsic value of Planet is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Planet Fitness. Please read more on our
fundamental analysis page.
How effective is Planet Fitness in utilizing its assets?
Planet Fitness reports assets on its Balance Sheet. It represents the amount of Planet resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Planet Fitness aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Hotels, Restaurants & Leisure space. To get a better handle on how balance sheet or income statements item affect Planet volatility, please check the breakdown of all its
fundamentals.
Are Planet Fitness Earnings Expected to grow?
The
future earnings power of Planet Fitness involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Planet Fitness factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Planet Fitness
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Planet
expected earnings.
Planet Fitness Gross Profit
Planet Fitness Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Planet Fitness previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Planet Fitness Gross Profit growth over the last 10 years. Please check Planet Fitness'
gross profit and other
fundamental indicators for more details.
Breaking it down a bit more
Another aspect you should look at is the equipment, and whether it is leased or owned. This is interesting to note because if the facility owns its equipment, the cost associated with that will decrease to maintenance. Industries that can limit overhead are awesome investments because they do not need to maintain inventory or anything of the sorts.
Fitness in America is beginning to increase as people are becoming more educated on what they are consuming and how their own bodies work. The ability to capture this market share is important as many people are looking to stay fit but do not need all of the extras a traditional gym may offer. If you have ever been to a Planet Fitness, you will note they do not many free weights or similar items, which lends to the promotion of their business not being a gym and a judgment free zone.
This is a unique industry that will appear to always be around so be sure to take a good long hard look and see if it is a good fit for your portfolio. Fitness will go through cycles similar to diets, but people will always needs a place to put in a solid workout. The main competition are the businesses such as Anytime Fitness and other chain fitness centers. Also, they have to entice the people who live in apartments that have gyms on site to come join their fitness center. Overall, this industry will be here for quite some time so take a look and see if this is a good fit for your portfolio.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Planet Fitness. Please refer to our
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