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Planet Fitness vs. Nautilus: Which Gym Stock is a Better Choice?

Fitness stocks are looking quite attractive, although their near-term direction could hinge on the path of the coronavirus. If case counts keep rising, and it becomes necessary to impose shutdowns and restrictions, then home gym equipment stocks should outperform. However, if case counts start dropping, then it's likely that normalization will resume and gym stocks could outperform as people sign up for memberships. Below, we provide a look at two of the top stocks in the gym and fitness space: Planet Fitness (PLNT) and Nautilus (NLS).

Fitness stocks are looking quite attractive, although their near-term direction could hinge on the path of the coronavirus. If case counts keep rising, and it becomes necessary to impose shutdowns and restrictions, then home gym equipment stocks should outperform.   However, if case counts start dropping, then it's likely that normalization will resume and gym stocks could outperform as people sign up for memberships.

 

Below, we provide a look at two of the top stocks in the gym and fitness space: Planet Fitness (PLNT) and Nautilus (NLS).
 
PLNT

PLNT, based in Hampton, NH has been in business for nearly 30 years. PLNT is one of the top fitness center franchisors and operators in the country. In the first quarter of the year, PLNT had around 15 million members working out across more than 2,100 stores in all 50 states as well as several foreign markets. PLNT’s stores and operations are in locations ranging from Australia to Canada, Mexico, Panama, Puerto Rico, and beyond. Revenue is organized into three distinct segments in Corporate-owned stores, Franchise, and Equipment. The Franchise segment accounted for more than half of last year’s aggregate revenue.

PLNT has a D POWR Rating grade. This grade indicates the stock is a Sell. Though PLNT has a solid Momentum component grade of B, the stock disappoints in most of the rest of the POWR Ratings components. PLNT has an F Sentiment component and Ds in the Stability and Value components. You can find out more about how PLNT fares in the rest of the POWR Ratings components such as Quality and Growth by clicking here.

PLNT has a forward P/E ratio of 81.62. This is a high ratio. PLNT is trading about $15 below its 52-week high of $90.34. The stock's 52-week low is $52.68. PLNT has a beta of 1.24, meaning it is likely to hold steady should the market rapidly ascend or descend.

PLNT is ranked last of the 35 stocks in the Athletics & Recreation space. This segment as a whole has an A POWR Rating grade. You can find out more about the stocks in this category by clicking here.

The top analysts are bearish on PLNT. The analysts have established an average target price of $72.43 for the stock. If PLNT hits this target price, it will have declined by nearly 5%. The lowest analyst target price for PLNT is $55.

NLS

NLS home fitness machines are revered by industry experts and customers alike. The company makes fitness machines sold under the names of Schwinn, Octane, Bowflex, Universal, and of course, Nautilus. NLS products include fitness accessories, indoor cycling stations, free weights, ellipticals, treadmills, and even complete home gyms.

NLS has a forward P/E ratio of 5.30, indicating it is underpriced at $13.30 per share. NLS has a 52-week high of $31.38 and a 52-week low of $10.68. The stock has a 1.59 beta, meaning it probably won't waver too much if the market makes a major move.

NLS has a B POWR Rating grade. This grade indicates the stock is a Buy. NLS also has an A Value POWR Rating component grade, a B Growth component grade, and a B Quality component grade. Investors who would like to learn more about how NLS fares in the rest of the POWR Ratings components such as Momentum and Stability can do so by clicking here.

A total of 35 stocks are in NLS's Athletics & Recreation space. NLS is ranked 12th out of these 35. Investors who would like to learn more about the stocks in this category can do so by clicking here.

The top analysts are pounding the table in favor of NLS. The analysts' average price target for the stock is $27.25. If NLS reaches this target price, it will have climbed by more than 90%. The lowest target price for NLS is $17.

Which is the Better Choice?

NLS is the better choice. NLS has a B POWR Rating grade. PLNT has a D POWR Rating grade. Roll with NLS and there is a good chance you will like the outcome.


PLNT shares were trading at $75.90 per share on Friday morning, up to $0.03 (+0.04%). Year-to-date, PLNT has declined -2.23%, versus a 19.93% rise in the benchmark S&P 500 index during the same period.



About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.

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