Neil Patel, The Motley Fool

Fri, May 23, 2025, 2:05 PM5 min read

• New store openings, coupled with comparable sales growth, helped this business drive a double-digit revenue gain in Q1.

• Management believes there is a tremendous expansion opportunity, which is supported by a franchisee operating model.

• Investors looking to buy shares today must consider the valuation.

• 10 stocks we like better than Planet Fitness ›

In the past 12 months, the S&P 500 index has generated a total return of 13% (as of May 21). This is a wonderful outcome, despite there being a ton of volatility in the past three months, thanks to uncertainty about trade policies and the overall economy.

But some businesses have fared much better. There's one growth stock that has handily outperformed the broader index, as it's up 61% in the past year. Continue reading to learn what this company is and whether or not it should be in your portfolio.

Investors should become familiar with Planet Fitness (NYSE: PLNT). The low-cost fitness center chain reported solid financial results for the three-month period that ended March 31 (Q1 2025). Revenue increased 11.5% to a total of $277 million. The top-line figure was driven by the opening of 19 net new locations, bringing the total to 2,741. Besides the U.S., Planet Fitness has a presence in Canada, Panama, Mexico, Australia, and Spain.

Further supporting the revenue gain was same-store sales (SSS) growth of 6.1%. This is a key performance metric for any retail-based business. It demonstrates increasing productivity from existing locations. To see a positive figure here is definitely an encouraging sign.

Planet Fitness' management team remains optimistic in the face of ongoing macro uncertainty. They expect SSS to rise between 5% and 6% in 2025, with revenue to increase by 10%. The plan is to open 160 to 170 new locations this year.

Planet Fitness made headlines a year ago when it decided to increase the price of its basic membership option from $10, where it had stood for 26 years, to $15 per month. Even at the higher monthly rate, it's difficult to argue that the business doesn't offer customers a very compelling value proposition. This is demonstrated by Planet Fitness adding a notable 900,000 new members in Q1, now bringing the total to a whopping 20.6 million. This huge figure clearly highlights an incredible product-market fit.

There are fears about a potential economic downturn on the horizon in the not-too-distant future. The fact that Planet Fitness' cost is so low could help it minimize membership churn better than other more expensive rivals might deal with.