My first article as a proud Motley Fool team member was a bullish piece on Planet Fitness (NYSE:PLNT). Since the call, the company has added close to 60% in equity value, and I think the move is just beginning. With another month of coronavirus in the past, I am as confident as ever in the future success of this company. Let's unpack why.

Like other service retailers, Planet Fitness is rather shielded from the threat of e-commerce. Its offering is not something easy to emulate at home. I can buy a hat, goldfish or even car all from the comfortable seat of a couch. But I can't really go to the gym from home. 

Planet Fitness

Image source: Getty Images

Building a home gym to replace a gym membership is expensive and time-consuming. Peloton is currently one popular solution, but its high price tag buys you a single machine, while an affordable Planet Fitness membership grants customers access to all the equipment and trainer support one could want.

Poised to endure

While shutdowns surely hurt business temporarily, this stock has stamina. Planet Fitness's sub-10% quarterly cash burn rate in a zero revenue environment means they can withstand a long-term complete economic shutdown before the balance sheet becomes a pressing concern. In an industry already seeing multiple bankruptcies, how is this possible? 

Unlike its competition, Planet Fitness does not directly own roughly 95% of its locations. Instead, the umbrella company's franchisees pay periodic royalties for the right to use the Planet Fitness brand and bear associated property ownership costs. 

To ensure its customers ultimately do come back, CEO Chris Rondeau decided to pause memberships fees rather than continuing to charge customers. Beyond halting inactive memberships, the company has not even started advertising or promoting their gyms, and is instead focusing on ensuring its current members feel safe in open locations.

With no marketing spend, frozen memberships and an ongoing pandemic, one may think sales at open locations would be weak. Think again.

Cancellations have not seen the widely expected spike, perhaps due to proactive fee-freezing. Furthermore, in the locations open again, sign-ups are roughly in line with last year -- with no advertising. Rondeau's decision to put his customers over short term profit seems to be paying off, and the company's industry-low cost can only help further.

Value proposition

A standard membership at Planet Fitness costs consumers roughly $150 annually. Popular membership plans seen as good value at other chains charge upwards of $600 annually, quadrupling Rondeau's membership cost.

Their unmatched value proposition becomes more compelling amid financial hardship. During the financial crisis of 2008-2009, when consumer spending was drastically hurt, Planet Fitness actually expanded their market share and grew.

That hardship is unfortunately here once more with COVID-19. Chris Rondeau is confident the company can win market share in this crisis as well. In a recent interview, the CEO went as far as saying this pandemic will speed up his company's growth by multiple years.

Insider stock purchase

Rondeau put his money where his mouth is in March, purchasing over $2 million dollars in stock at prices close to where the market value sits today. Insider purchases from the main boss serve as yet another bullish signal for investors; I think this company executive's recent optimism could be related to improving real estate markets.

Competing brick and mortar gyms like Gold's Gym and department stores like JC Penny are shuttering operations. The pandemic is forcing some employers to rethink office space needs and others to shutter completely. This could potentially create surplus commercial real estate supply for an opportunistic buyer like Planet Fitness. As of today, the chain is pushing 2000 locations nationwide. Long-term, Rondeau wants to see 4000 locations nationwide -- perhaps this will get him there sooner than many think. 

Over the last few weeks, Planet Fitness has become a more expensive stock, and for good reason. Chris Rondeau's company will weather this storm while some competition cannot, and therefore should take new, revenue-boosting market share. Now may not be the time to take profits on this rising stock.