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‘Consumers are headed back to the gyms,’ according to Jefferies analyst Randal Konik.
Patrick T. Fallon/AFP via Getty Images
Planet Fitness
stock is a Buy as people return to the gym, said an analyst from Jefferies, who called the at-home-fitness craze a thing of the past.
Jefferies analyst Randal Konik wrote Thursday that dismal earnings and a bleak forecast from
Peloton Interactive
(ticker: PTON) were proof that “consumers are headed back to the gyms, and in-home fitness is continuing to fade.” He recommended investors buy
Planet Fitness
(PLNT) stock now.
Peloton was a winner during the height of Covid-19 since it offered exercisers the ability to feel like they were getting a gym-like workout while they stayed indoors during pandemic-enforced lockdowns. But now that pandemic restrictions have lifted, Peloton has struggled mightily to maintain that same level of success.
Earlier this summer, Peloton announced it was going to solely rely on partners to make bikes and treadmills as it looked to simplify costs. Then earlier this month the at-home-fitness company said it was cutting around 800 jobs as part of a strategic overhaul. On Wednesday. Peloton announced it struck a partnership with
Amazon.com
(AMZN) to sell select hardware and accessories in the online retailer’s U.S. stores.
But the story doesn’t end there. Peloton stock was sinking 20% Thursday after the company posted worse-than-feared fiscal fourth-quarter results and issued downbeat guidance for its first quarter. The stock has now fallen about 70% in 2022.
“It all means the gyms are back and back in a big way,” Konik wrote. He added that Planet Fitness has reached 16.5 million members, a new peak for the company, and “comparing the gym/boutique metrics with Peloton’s results, it’s clear that at-home/digital fitness was a fad.”
Along with Planet Fitness, Konik recommends buying stock of
Xponential Fitness
(XPOF), another gym brand.
“With the gym industry highly fragmented and occupied by mostly mom and pops, we want to gain exposure to gym/boutique industry players that can gain share,” Konik wrote. “Planet Fitness and
Xponential Fitness
are the largest players in the gym and boutique spaces, respectively.”
Shares of Planet Fitness were down 0.5% Thursday to $76.46. The stock has fallen 16% in 2022.
Write to Angela Palumbo at [email protected]
