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3 Big Winners From a Coronavirus Vaccine

By Rick Munarriz - Jan 22, 2021 at 11:55AM

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Less than 1% of the country has received the two required doses of a COVID-19-tackling vaccine, but it's just a matter of time before the beneficiaries start to bounce back.

It's been more than a month since the coronavirus vaccine became available in the U.S., and the process has been slow to say the least. Less than 5% of the country has received the first of the two required doses of either vaccine. Just 2.2 million people -- or less than 1% of the country -- have completed the dual dose vaccination process. 

A lot of businesses that were decimated in 2020 should bounce back when more of the population is vaccinated and more comfortable returning to some of their former haunts. Dave & Buster's (PLAY -3.81%), Planet Fitness (PLNT -2.04%), and Eventbrite (EB -5.74%) are three stocks in particular that have a lot to gain from the successful rollout of coronavirus vaccines. Let's take a closer look. 

Folks celebrating at a Dave & Buster's with the old-style prize redemption tickets.

Image source: Dave & Buster's.

Dave & Buster's  

Step into a Dave & Buster's and you begin to see why the chain of big-box stores that blend casual dining with arcade gaming in a high-energy scene is struggling right now. A lot of people are avoiding dining indoors. They're also going to be hesitant handling a joystick, billiards cue stick, or Skee-Ball ball that's been handled by others without being sanitized. 

Just 104 of the 139 Dave & Buster's units were open by the end of its latest fiscal quarter that wrapped up in early November, and comps at the reopened locations experienced a brutal 66% slide. Things will naturally get better as the vaccine rolls out to the younger segment of the population that see Dave & Buster's as a one-stop shop for dining, drinking, and diversions. 

Dave & Buster's may emerge even stronger out of the pandemic than it was going into the crisis. It cut costs during the lull to the point that all but 24 of its 104 reopened stores are already generating positive store-level EBITDA despite doing just a third of the business as before. Just imagine what will happen to the bottom line here when things return to normal.

Planet Fitness

The best-performing gym operator before last year's calamity was Planet Fitness. The fitness center chain was growing fast, attracting mainstream consumers of all shapes and sizes to its compelling value proposition. With memberships starting at as little as $10 a month and no long-term commitments it's easy to see why Planet Fitness has exploded on the scene -- until the pandemic. 

Planet Fitness had 95% of its gyms reopened by November, but revenue in its latest quarter plummeted 37%. Comps had been positive for a stunning 53 consecutive months before it had to temporarily shutter its stores in the springtime of last year. If you thought that going to a Dave & Buster's was rough, imagine having to break into a masked vigorous workout with other sweaty patrons all around you. 

Planet Fitness will be back, and like Dave & Buster's, probably even better. I imagine even more people looking to get back in shape after the shelter-in-place lull will want to do so as cost-effectively as possible. Planet Fitness is going to be a big coronavirus vaccine winner with its rock-bottom pricing and strong brand reputation. 

Eventbrite

Remember going to a crowded music festival, a star-studded comedy show, or an entertainment convention loaded with like-minded souls? Eventbrite certainly remembers. It sold 309 million tickets across 4.7 million events in 2019. Things obviously aren't the same these days. Revenue plummeted 73% for the online ticketing specialist in its latest quarter. 

Performers and organizers have tried to recreate the magic online, but the public isn't going to pay as much for a virtual experience. There's also screen fatigue starting to set in, gnawing away at public demand for literally flat performances. Obviously Eventbrite needs a successful vaccination program to get folks coming out to shows, conferences, seminars, and other events again. Pent-up demand will be substantial, and with folks surprisingly saving up a lot of money during the pandemic you can bet that a lot of money will flow into the arts, entertainment, and education markets that make Eventbrite tick. 

Dave & Buster's, Planet Fitness, and Eventbrite aren't at their best right now. It won't always be that way for these consumer discretionary stocks. As they say in Hamilton, they are not throwing away their shot -- their coronavirus vaccine shot, that is. 

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Stocks Mentioned

Dave & Buster's Entertainment, Inc. Stock Quote
Dave & Buster's Entertainment, Inc.
PLAY
$33.62 (-3.81%) $-1.33
Planet Fitness, Inc. Stock Quote
Planet Fitness, Inc.
PLNT
$69.58 (-2.04%) $-1.45
Eventbrite Stock Quote
Eventbrite
EB
$10.51 (-5.74%) $0.64

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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