Is This Gym Stock Inflation Proof?

Jul 02, 2022

When many COVID-related restrictions ended at the start of January, we noted a significant drop in working out from home as gyms were able to reopen.

While part of the fitness boom could, in part, have been attributed to the time of the year (resolutions for 2022), there was no doubt pent-up demand played a leading role.

But even as those resolutions are now forgotten about, fitness trends have continued to climb.

According to Placer.ai, fitness club visits in Q4 2021 and Q1 2022 have not only matched pre-pandemic levels, but they’ve also exceeded them.

LikeFolio data shows a rise in gym-related trends, with new gym membership mentions trending at 7% higher year-over-year (YoY), while weight training mentions are up 23% YoY.

Even during the pandemic, one gym was able to capture a significant share of the market, and it could be in a great position to acquire new customers who want to work out but not spend a lot on a membership.

Outpacing Competitors

The company I’m talking about is Planet Fitness Inc. (PLNT).

PLNT Purchase Intent Mentions are trending 72% higher YoY, outpacing other gyms such as Equinox, Anytime Fitness, LA Fitness, and 24 Hour Fitness by a large margin.

With inflation still running wild, consumers will continue to trim unnecessary expenses, such as high-cost gyms, in favor of cheaper alternatives like Planet Fitness.

A membership at Planet Fitness costs as little as $10 per month.

As you can see in the chart below, Planet Fitness is dominating the workout landscape in terms of Purchase Intent Volume.

Nice traction.

Consumer Buzz

While still not back at pre-pandemic levels just yet, Overall Consumer Mentions are also on the rise, up 32% YoY in Q2 2022.

More importantly, the company’s revenue (represented by the lighter blue line) jumped back to just below pre-pandemic levels in Q1 2022 at $186 million.

Bottom Line: Planet Fitness looks primed for growth. The company was already expanding before the pandemic and managed to extend its market share over the last year.

With inflation resulting in consumers tightening wallets, potentially limiting the price they pay for gym memberships, Planet Fitness looks perfectly placed to capitalize.