When it comes to the health and wellness industry, Peloton Interactive seems to have gotten most of the attention over the past several years. There's a better business that investors should look at if they want exposure to this market, though.
Consider Planet Fitness (PLNT 2.22%), mainly because it has solid fundamentals. The fitness club operator's shares have been very volatile, and they trade 29% below their peak (as of March 4). If you think this is a possible buy-the-dip investment candidate, take the time to learn these three things first.
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1. Expanding the physical footprint
Growth has been the key factor driving this business. A decade ago, at the end of 2015, there were 1,124 Planet Fitness locations. As of Dec. 31, 2025, there were 2,896 clubs in total, with a small presence in Canada, Panama, Mexico, Australia, and Spain. The leadership team believes that there's potential for 5,000 in the U.S. over the long term.
Planet Fitness now has 20.8 million members, a massive figure that makes it one of the largest such chains in the world. Despite a choppy macroeconomic environment, the customer base is significantly larger than it was five years ago.
Even though it increased the base membership's monthly fee from $10 to $15 in 2024, Planet Fitness still maintains its "high-value, low-price" positioning. But getting more people to upgrade to the $25.99-per-month Black Card, which comes with added perks, is lucrative. The current penetration rate is near 67%.
2. Copying the fast-food playbook
Large fast-food enterprises are known for adopting franchise business models. Planet Fitness operates the same way. It's worth noting that just 10% of its locations are actually owned by the company.
This setup allows the business to scale up in a more efficient and capital-light manner, reducing the need for large investments. There is robust demand to open Planet Fitness gyms, as signed agreements are in place to open 750 new clubs. Newer locations are growing their sales volumes at a faster clip.
Planet Fitness' earnings per share are expected to rise by 60% between 2025 and 2028, better than the 34% projected revenue gain. This highlights the profit potential of the franchise system.
NYSE: PLNT
Key Data Points
3. Paying up for fitness exposure
Planet Fitness continues to report healthy revenue gains. And it's consistently profitable. That makes this a higher-quality business than Peloton.
However, the valuation isn't at a bargain level. Investors who want exposure to this industry must be willing to pay a price-to-earnings ratio of 30.9. Armed with more knowledge about this company, investors have to figure out for themselves if this is an attractive entry point.
