Planet Fitness (PLNT) PT Raised to $26 at Imperial Capital
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Imperial Capital analyst George Kelly reiterated an Outperform rating and raised his price target on Planet Fitness (NYSE: PLNT) to $26.00 (from $25.00) following Q3 results.
3Q16 results summary. On 10/26/16, Planet Fitness reported revenue and adjusted EBITDA of $87mn and $35mn, respectively, versus our estimates of $80mn and $32mn. Results benefitted from system wide same store sales growth of 10%. Total membership grew 21% year-over-year (yoy) to 8.7mn. We believe Planet’s brand and model continue to resonate with consumers.
Franchise business. The franchise business (excluding commissions) grew 43% yoy, well above recent growth, due to higher franchise fees and growth in franchise level revenue. The owned club base also delivered yoy growth, albeit at a slower rate.
Guidance update. Management raised 2016 guidance for the third time this year. Revenue and EPS guidance grew to $373mn–378mn and $0.66–0.67 versus $366mn–372mn and $0.62–0.65.
Management reiterated same store sales growth of HSD.
Special dividend. Management announced that it is hoping to expand its credit facility and will utilize it and existing cash to fund a $280mn special dividend. Leverage would grow to 4.6x.
Shares of Planet Fitness closed at $21.16 yesterday.
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