There are a lot of people working out at Planet Fitness (PLNT 0.24%) these days, and that includes its stockholders. The value-priced gym operator announced this week that its membership based topped 10 million accounts by the end of March.

Any membership-based outfit hitting eight figures in premium users is notable, but for Planet Fitness it's even more impressive because it had just 8.9 million members at the end of 2016. Increasing its rolls by 1.1 million thrifty fitness seekers in just three months is a pretty big deal. Planet Fitness' user base grew by just 1.6 million for all of 2016.

It's true that the first quarter is a seasonally potent time for gym sign-ups given the nature of New Year's resolutions. Planet Fitness is there to meet both the resolutions to get in shape as well as the call to be more frugal with money given its contract-free memberships starting at just $10 a month. A whopping 1 million of the 1.6 million net new members in 2016 signed up during the first three months of last year. But 1.1 million net additions is still a new record for Planet Fitness, and the scalability of its model will make the most of its 10 million accounts. 

An exterior of a Planet Fitness gym.

Image source: Planet Fitness.

Working out

Hitting 10 million members has been the handiwork of expansion. Planet Fitness kicked off the year with 1,313 gyms with plans to open roughly 200 more through 2017. However, let's not dismiss store-level growth. Most of those 1.1 million net additions probably signed up at existing gyms, setting up the first quarter to likely stretch its streak of positive year-over-year comps to 41 quarters in a row. Systemwide same-store sales increased 10.6% during the fourth quarter.

Planet Fitness is doing a lot of things right, but it can use the good news. The stock slipped last month after a ho-hum guidance and a secondary offering weighed on market sentiment. 

Wedbush analyst James Hardiman assumed coverage on Planet Fitness two weeks ago with a neutral rating and a price target of $22. The firm previously had an outperform call on the stock and a price goal of $23. Hardiman sees comps decelerating as the store base grows.

The secondary offering also didn't help. The 15 million shares detailed in the offering wouldn't be dilutive. The move cashes out existing shareholders without printing new shares. However, it does increase the float, and that's before we even get to the message being sent when substantial investors are moving out.

Planet Fitness and its compelling value proposition -- $10 a month for access to its workout machines without the overhead of swimming pools, group fitness classes, and day care centers -- is clicking with mainstream consumers that don't typically spring for costly plans at full-featured gyms full of well-heeled hardbodies. A survey of 1 million members last year found that Planet Fitness was the first gym for 40% of them. Tack on the interesting dynamic where Planet Fitness is cashing in on the retreat of traditional retailers -- as many new locations are popping up in superstore vacancies within desperate strip malls -- and you have a growth stock that's just starting to break a sweat. Hitting 10 million members is great, but it's just the first rep.