Planet Fitness Stock Drops Today, Here's Why

Planet Fitness, the gym chain, saw its stock price drop significantly after releasing financial results. The stock was down 15% around noon and has fallen about 28% from its highest point. This is not common for the company.

Planet Fitness just gave its financial update for Q1 2023. Revenue for the quarter was $222 million, up 19% from the previous year. The increase was due to more people signing up for gym memberships. A total of 18.1 million people were members by the end of the quarter, a gain of 1.1 million from the previous quarter.

Planet Fitness did great in Q1, but their revenue didn't meet Wall Street's expectations. Analysts also expected the company to have earnings of $0.46 per share, but they only had $0.41 per share.

Planet Fitness made a profit of $0.27 per share, which is 42% more money than last year. This is considered good by rules called GAAP. But the market still wasn't happy with the results.

I think the important thing about Planet Fitness is that they didn't give financial guidance for just the first quarter. Some people might be disappointed with Q1 results, but management seemed to know what was coming. They still believe they'll meet their goals for the whole year. This means Q1 is going as planned.

Planet Fitness is doing well and growing on schedule. Some people might think it's an expensive stock. After today's results, the stock price dropped. Now, it trades at about 55 times earnings. That's pretty pricey for a company that's only expecting 13-14% growth this year.

Jon Quast owns shares in Planet Fitness. The Motley Fool also owns shares and recommends Planet Fitness. The Motley Fool has a policy for disclosing their assets.