Planet Fitness Investors Should Keep an Eye on This Important Revenue Generator
At first glance, Planet Fitness (NYSE: PLNT) possesses many characteristics of a lucrative growth stock. Due to its attractive franchisee model, customer-focused culture, and scale advantages, earnings have increased 37% annually from 2015 through 2019.
The stock has followed this outstanding fundamental performance, soaring fourfold since its IPO less than five years ago. However, astute investors should dig beneath the surface to gain a better understanding of the overall business.
The most attractive business model is that of a capital-light compounder. Warren Buffett is quoted as saying that, "The best business is a royalty on the growth of others, requiring little capital itself." Planet Fitness' franchisee model fits the bill here.
Source Fool.com