Planet Fitness Stock Has Been Absolutely Hammered This Year. Is It Time to Buy?

Most investors are running away from Planet Fitness (PLNT). You should be running toward it. Shares of the budget gym chain have been absolutely crushed this year, down nearly 50% from their 2026 highs. But here's what Wall Street is missing: Planet Fitness isn't just another COVID casualty — it's a cash-generating machine trading at fire-sale prices.

Why Is Everyone So Bearish on Planet Fitness?

The bears have three main arguments: slowing membership growth, rising labor costs, and competition from home fitness startups like Peloton (PTON). And yes, these are legitimate concerns. Planet Fitness added just 1.5 million members in 2026, its slowest growth rate since 2020. Labor costs are up 12% year-over-year, squeezing margins. And Peloton, despite its own struggles, continues to nibble away at the low-cost fitness market.

But here's the kicker: Planet Fitness is still printing money. The company generated $1.2 billion in revenue last year, with an EBITDA margin of 38%. Compare that to Peloton, which burned through $500 million in cash and posted negative EBITDA margins. Even traditional gym chains like Life Time Group (LTH) can't match Planet Fitness's profitability.

The Numbers Wall Street Isn't Looking At

Let's dig into the valuation. At its current price, Planet Fitness trades at just 12x forward earnings, compared to its five-year average of 28x. That's cheaper than both the S&P 500 (18x) and the consumer discretionary sector (20x). And it gets better: Planet Fitness's enterprise value is just 8x EBITDA, a 40% discount to its historical average.

Here's how Planet Fitness stacks up against its peers:

As you can see, Planet Fitness isn't just cheaper — it's fundamentally stronger. Its EBITDA margin towers over competitors, and its debt load is manageable at just 2.5x EBITDA.

The Contrarian Case for Planet Fitness

So why is Planet Fitness so undervalued? Blame recency bias. Investors are focusing on short-term headwinds — like slower membership growth — while ignoring the long-term tailwinds. Here's what they're missing:

1. Recurring Revenue Model: Planet Fitness derives 85% of its revenue from membership fees, providing steady cash flow even in downturns.
2. Franchise Growth: The company has 2,300 locations, with plans to expand to 4,000 by 2030. Franchisees pay 7% royalties, creating a high-margin income stream.
3. Economic Moats: At just $10/month, Planet Fitness is virtually immune to competition. Even home fitness can't match that price point.

What Should Investors Do?

If you're a long-term investor, this is your chance to buy a high-quality business at a bargain price. But timing is everything. Wait for signs of stabilization in membership growth before pulling the trigger. And keep an eye on labor costs — if they continue to rise, margins could come under pressure.

For those looking to diversify, consider pairing Planet Fitness with other undervalued consumer stocks like Starbucks (SBUX) or Chipotle (CMG). Both companies have strong brands, loyal customers, and proven business models — and both are trading at discounts to their historical averages.

Ready to analyze these stocks? Search any ticker on MainRatios to see valuations from 6 legendary investors — free.

The best investments often start with the most pain.