Planet Fitness (NYSE:PLNT) was on quite a hot streak prior to the onset of the coronavirus pandemic. From its IPO in Aug. 2015 to Feb. 20 of this year, the stock had gained 450%. It had all the makings of a growth stock as revenue nearly doubled from 2015 to 2019.

The last few months, however, have been a roller-coaster ride for the company as the COVID-19 health crisis forced it to temporarily shutter locations across the United States. While 1,200 Planet Fitness gyms were reopened by mid-June, a surge in new coronavirus cases is prompting some state governors to restrict business operations yet again. Investors looking for any sort of clarity will have to wait, but I still believe the stock should be on your watch list.

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Customer value proposition

Planet Fitness upended the fitness industry by presenting an extremely low-cost option targeted to the casual gym-goer. The company differentiates itself from other fitness clubs by offering an extra welcoming environment. It looks to be working as Planet Fitness now has a whopping 15.5 million members and more than 2,000 locations. The quarter ended March 31 was the 53rd consecutive quarter of same-store sales growth.

Once the country eventually gets past the current crisis, I have no reason to believe that Planet Fitness can't continue this trend. With the cheapest membership at $10 per month, the company is also well-positioned to thrive in a recessionary environment. Of the stores that reopened in May, the number of member visits continues to climb consistently, while there has been no real change in membership levels. Additionally, an emphasis on providing superior customer service at its gyms will support growth.

Branding

One of Planet Fitness's strengths is its marketing strategy. The company's massive footprint allows it to benefit from increased efficiency as dollars spent on marketing become more productive over a larger store count. Since 2011, an estimated $870 million has been spent on national and local marketing campaigns. This was more than the company's total revenue in 2019. As more locations continue opening up, CEO Chris Rondeau hopes for a boost in national marketing spend toward the end of summer.

Planet Fitness has created a new phrase during the current health crisis after its stores reopened -- "Social Fitnessing." The company is taking extra steps to ensure its members are in the safest position possible as they return to gyms. In addition, members can take advantage of trainer-led workouts, which are free for streaming from Facebook or YouTube. Planet Fitness customers will surely appreciate this emphasis on cleanliness in its gyms and the fact it's also offering exercise options from home.

Growth

While the pandemic certainly stalled growth plans in 2020, company President and CFO Dorvin Lively pointed out on the most recent earnings call that a favorable real estate market could help Planet Fitness: "We believe the impact from COVID-19 on the real estate industry will provide a more favorable real estate environment for the Planet system over the long term as we continue to build out toward 4,000 locations in the U.S."

In addition to new store openings, higher Black Card penetration will be paramount to the company's growth trajectory. The Black Card is a premium membership that has many perks, including access to any Planet Fitness location, the option to bring a guest with you any time, discounts on beverage purchases, and access to tanning and massage beds. At a monthly price of $22.99, these cost considerably less than the industry median of $71 per month and provide an attractive offering to consumers.

A larger store base also translates to more recurring revenue coming from equipment sales, which is an important part of the overall business. In 2019, equipment sales accounted for 37% of total Planet Fitness revenue. As franchisees are contractually obligated to purchase equipment from Planet Fitness, both new and old locations will result in higher equipment sales for the company.

Investors should breathe a sigh of relief as this long-term strategy and addressable market for the company stay intact.

Is the stock a buy?

Although Planet Fitness stock is still down over 25% year to date, it has a strong track record with shareholders. The biggest question mark for the company is one common to much of the world -- no one really knows what the rest of 2020 will look like. With that in mind, investors thinking of buying shares are better served by being patient and waiting until this near-term risk subsides.

The company has successfully capitalized on appealing to a broad segment of the population with its fitness offerings. These low-cost gyms will be the first option for health-conscious consumers looking to save money and curb their monthly spending. If the coronavirus causes another shutdown across the U.S. though, shareholders will be glad they waited before jumping into the stock. I urge investors to add this one to their watch lists instead.