Have you been paying attention to shares of Planet Fitness (PLNT)? Shares have been on the move with the stock up 4.1% over the past month. The stock hit a new 52-week high of $102.9 in the previous session. Planet Fitness has gained 39.5% since the start of the year compared to the 15.1% move for the Zacks Consumer Discretionary sector and the 23.4% return for the Zacks Leisure and Recreation Services industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 7, 2024, Planet Fitness reported EPS of $0.64 versus consensus estimate of $0.58.

For the current fiscal year, Planet Fitness is expected to post earnings of $2.50 per share on $1.17 billion in revenues. This represents a 11.61% change in EPS on an 8.86% change in revenues. For the next fiscal year, the company is expected to earn $2.93 per share on $1.28 billion in revenues. This represents a year-over-year change of 17.04% and 10.04%, respectively.

Valuation Metrics

Planet Fitness may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Planet Fitness has a Value Score of D. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 40.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 23.4X. On a trailing cash flow basis, the stock currently trades at 25.4X versus its peer group's average of 11.4X. Additionally, the stock has a PEG ratio of 3.38. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Planet Fitness currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Planet Fitness passes the test. Thus, it seems as though Planet Fitness shares could still be poised for more gains ahead.

How Does PLNT Stack Up to the Competition?

Shares of PLNT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is OneSpaWorld Holdings Limited (OSW). OSW has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of F.

Earnings were strong last quarter. OneSpaWorld Holdings Limited beat our consensus estimate by 13.04%, and for the current fiscal year, OSW is expected to post earnings of $0.97 per share on revenue of $892.66 million.

Shares of OneSpaWorld Holdings Limited have gained 8.4% over the past month, and currently trade at a forward P/E of 23.95X and a P/CF of 26.98X.

The Leisure and Recreation Services industry is in the top 11% of all the industries we have in our universe, so it looks like there are some nice tailwinds for PLNT and OSW, even beyond their own solid fundamental situation.

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