Valens Research Weekly Equity Idea Highlight for March 14, 2018 – Planet Fitness, Inc.
This week the Valens Securities team highlights our most interesting equity insight from across our tools and our analysis.
Market’s lack of respect for the upside of PLNT’s franchising strategy, strong management execution, growing management confidence, and overstated credit concerns for the business point to substantial equity upside
PLNT has been focused on an asset-light franchising model that is likely to drive substantial UAFRS-based (Uniform) ROA expansion over the coming years, but based on the company’s low valuations, the market does not appear to recognize this. PLNT trades at a significant discount to any other companies in the consumer space that are currently undergoing a similar franchise growth strategy, pointing to the market’s pessimism.