One of the booming (and at the same time a bit annoying) themes at the moment is weight-loss. Practically no day without such headlines. What in the past was a combination of a relatively clean diet paired with frequent activity to stay in shape, today seems to have shifted towards wonder drugs to do the job. Of course genetics also play a role, but broadly speaking this was the formula. In my view going to “the gym” is unlikely to be replaced by weight-loss drugs, no matter how much space they occupy in the news. To the contrary, Planet Fitness is an interesting case to have an eye on.

Summary and key takeaways from today’s Weekly
– Although the focus is on the new pretend wonder drugs, weight-loss is much more than that.
– Planet Fitness has been a huge beneficiary from multiple factors, including healthier lifestyles, but also the cost of living crisis.
– The setup looks fairly good to put this one on my watchlist — but I have a better idea.

For some, going to the gym is a non-negotiable like brushing teeth or showering. For others it is too exhausting, over-crowded, uncomfortable, loud, doesn’t smell right, too far away, or simply they claim to not have the time for frequent exercises. Or they just don’t like it at all — which is fair enough.

In my view, it is a question of personal priorities.

I do not judge anyone — everyone is responsible for their own self.

Which in turn doesn’t mean there’s just one correct approach. Not pumping iron isn’t necessarily bad. There are different forms of sporting activities to choose from.

Personally, I was very active between when I turned 18 (from the first week) up to my early 30s. I barely had a longer lazy phase. During the lockdowns, I quit my membership — not throwing in the towel entirely of course. Doing something for the personal well-being (body and soul) has always been a part of me. I just switched to a home gym, and from irons to resistance bands and body-weight exercises.

While for me the gym is not as attractive as it was in the past, for many others it is.

I am convinced this will remain. Despite or maybe even because of the relatively new weight-loss wonder drugs, fitness is not a dying industry. To the contrary. One of the world’s biggest gym chains is even publicly listed — our topic for today.

Tip: If you are still searching for a compelling case in the weight-loss sector with a realistic chance to multi-bag, look no further. In September 2025, my Premium PLUS members received my report about a somehow forgotten name that even went through bankruptcy. But now, it is ready for fat gains after its painful diet.

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Healthy setup?

Before we do the heavy-lifting by looking at the fundamentals of today’s idea, first a brief overview of one of the world’s largest fitness chains.

Planet Fitness (ISIN: US72703H1014, ticker: PLNT) is a strong brand in America and among the largest, and at the same time fastest-growing, franchisors and operators of fitness centers in the world by number of members and locations.

The company is approaching 3,000 gyms of which about 10% are owned and self-operated, with the rest being franchised. About 20 million members visit the clubs in all 50 U.S. states, D.C., Puerto Rico, Canada, Panama, Mexico, Australia and even Spain (only European country).

The colors purple and yellow as well as a mission to welcome everyone judgement free, define the company. The entry level membership starts at 15 bucks per month, while a black card (to be raised from 24.99 USD to 29.99 USD) comes with further amenities like exclusive areas, massage chairs, tanning equipment, etc.

Planet Fitness does not offer (in their view) non-essentials like group exercise classes, pools, day care centers and juice bars to have more space for a more efficient use.

In essence, the business model of Planet Fitness reminds me of the one of McDonald’s (ISIN: US5801351017, ticker: MCD).

Not due to selling burgers and fries, but due to the mainly franchise-driven setup.

This means, Planet Fitness collects royalties and fees for licensing its brand name and concept. The big advantage of this model is it’s asset light, respectively little capital intensive. And, unlike other owner-operators, leasing liabilities are very low for real estate.

From a high level, the company has been publicly listed for a bit more than ten years. The stock returned 402% during this period, with a few ups and downs in between. Management decided not to pay dividends, but instead to invest into expansion as well as to opportunistically repurchase shares.

Regarding a few key fundamentals, PLNT has been and still is growing sales in the double digits, with some moderation observable compared to historical growth rates.

But still low double digits which is fine.

Long-term, margins have been on the rise rise.

However, the lockdowns and the subsequent inflationary disruption created a dent in both, gross and operating margins. Planet Fitness is slowly crawling out of this hole.

On a more granular level, we can see that the company managed to climb back above the 30% threshold for operating margins. Progress is noticeable and with the coming price hike for Black Card members as well as scaling through growth, there is clearly more room for improvement.

The latest twelve-month figure is a new high watermark — at least over the last five years.

Cash flows continue to rise and have even reached new all-time highs through better scaling. Despite growing investments into expansion, free cash flow has been very robust, too.

And this even despite negative working capital, so no artificial boost from timing shifts.

The latest available results from the third quarter 2025, showed the growth story is intact.

Planet Fitness reported to have 20.7 million paying members with same club sales (adjusted for new openings) up by 6.9%. Total sales, including new clubs, of which there were 35 opened, jumped by 13%. Interestingly, due to aggressive social media marketing campaigns, especially younger cohorts were acquired with 3.7 million teens having tried free workouts.

Of the total members, two thirds have been said to be Black Card subscribers, showing that despite about double the price the value is perceived to be higher compared to the entry level (sounds familiar to me, as around two thirds of my members joined Premium PLUS).

For the outlook, management had guided for growth to continue at this level, but with the bottom line expanding faster through higher margins. Earnings per share, supported by an accelerated buyback, but also cost efficiencies, were seen to be 16–17% higher.

This is quite a noticeable growth rate.

On 12 January 2026, management gave a trading update for the year end metrics, confirming they’re on track. Club count reached 2,896 and members grew to 20.8 million. Full results will be published in late February.

On their recently held investor day, Planet Fitness shows this interesting slide.

The total fitness club market as such is barely growing. But PLNT, which is positioned in the affordable middle (HVLP = high value low price) is benefitting and even growing above market.

So in essence, they’re gaining market share.

If you’re interested, flip through the presentation to see how their studios look like — focussing on the basics and operating at scale with high efficiency.

In terms of guidance for the next three years, Planet Fitness sees low double-digit percent CAGR for revenue (the current pace) and mid-single-digit growth for system-wide (owned and franchised) same club sales. The bottom line is expected to grow faster, as seen and discussed above.

But is there enough room to grow, as they’re already relatively big?

I think yes, it is realistic. Not only from gaining market share and benefitting from the cost of living crisis compared to higher-priced competitors. When looking at the U.S. population, about 265 million adults compare to just 20 million, or less than 10%, of Planet Fitness members.

Of course, never will the majority be accessible. Many people just don’t work out, for whatever reason. Others work out or are active, but not in the gym. This makes for about half the adult population.

The other half is interesting.

Planet Fitness targets active people who are signed up elsewhere for market share gains, and there’s a decent chance people from the middle of the bar could join — those who are active in some shape and form, but not fitness members.

Why do I think so?

I am targeting those people who take these GLP-1 wonder drugs. From what I have read and using common sense, the potential for new members is clearly there.

The drugs suppress appetite which leads to less eating. This includes less protein consumption (plus micro nutrients and vitamins etc.), which negatively affects muscle mass. If you don’t get enough protein, the building blocks, and in the worst case also are not active, the body burns muscles because they consume too much energy and aren’t used anyhow — “use it or lose it” comes into play.

Of course not everyone will be affected, but those who either have not exercised at all (the most in danger), or those who do no strength training, but for example only do cardio training.

It is not necessarily about staying in great shape or to have a big biceps, but just to keep a level of muscle mass that is healthy. Too low muscle mass means weaker calorie burning, and it means a higher risk for more pain and issues regarding joints and everyday moves. While not imminent, this is what I fear could be a potential long-term consequence.

So, people who are taking this stuff in my view will need strength training.

Sooner or later.

My worst-case nightmare scenario is that people drop pounds primarily through muscle loss and regain fat when they get off these drugs.

This article writes GLP-1 drugs to be effective (what I do not even doubt in the short-term) for weight loss but they are seen as no “magic bullet” or permanent cure for obesity — not to mentioned diabetes.

Weight regain is said to be almost inevitable for most people after stopping the medication, as the underlying drivers of obesity (behavioral, environmental, biological) persist. While temporary weight loss (even if regained) may still offer some health benefits for people with obesity, relying solely on these drugs long-term isn’t realistic for most.

Real-world data show many users discontinue GLP-1s within ~12 months, making regain a common practical issue. Wow. These medications should be viewed as adjuncts to — not replacements for — healthy diet, as well as lifestyle and behavioral changes — the cornerstones of sustainable obesity management.

This even does not tell us about potential long-term side effects like hormonal disruptions or gastrointestinal issues (if the new pill is taken).

That’s why the case for me is clear — people who are serious about it will need to take their destiny into their own hands. Fitness will be part of it, respectively one possible avenue. The two reasons why I am not getting active with the stock of PLNT, are the company’s debt level and the stock’s valuation.

Planet Fitness has about 1.8 billion USD in net financial debt (pre leasing). Compared to FCF of around 200 million USD, leverage is clearly too high. On top, the entire debt is securitized which comes with financial limitations, higher cost of debt, and dependencies. I’d like to see refinancing into unsecured debt and ideally overall lower debt levels.

PLNT stock has a market cap of 7.7 billion USD and an EV of 9.5 billion USD. This is way too much for an annual free cash flow of just 200 million USD. Despite the strong growth rates, there is no margin of safety. That’s why I am putting this one on my watchlist. The underlying story is interesting, but the current setup doesn’t fully convince me.

Conclusion

Although the focus is on the new pretend wonder drugs, weight-loss is much more than that.

Planet Fitness has been a huge beneficiary from multiple factors, including healthier lifestyles, but also the cost of living crisis.

The setup looks fairly good to put this one on my watchlist — but I have a better idea.

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