Sunday, March 12, 2017 11:55:34 AM
"Conclusion
This is a case of private equity doing what private equity is supposed to do. They bought into a growing company, helped it grow rapidly over five years, figured out a way to extract as much revenue as possible from franchisees, and then when the time was right, decided to take the company public and exit their investment for the highest price possible.
The structure of the deal, with the tax receivable agreement, the controlled release of shares to the public, the special dividend, and the way they account for equipment revenue, seem like a carefully planned strategy by clearly some sophisticated investors. It's almost a textbook example on maximizing value extraction. With an understanding of how brilliantly TSG has managed this exit, I would probably expect another quarter or two of aggressive growth targets and maximizing non-recurring income which most people view as real income, as they push to keep the growth story momentum going before they unload their final tranche of equity onto the public.
But my guess is that once they are out of the loop, we will see some serious moderation in growth.
Based on using what we feel are very generous assumptions, and correctly understanding that the large part of their income which is non-recurring should not be capitalized or valued with a multiple, results in a value for the stock of $9.40 per share versus the $21.70 where it trades at today. Finally, just on pure principle, I would never own a company that was subject to a tax receivable agreement, but assuming you are okay with it, the valuation is still extremely high. Buy a gym membership, it's a good deal - but run away from the stock.
Disclosure: I am/we are short PLNT."
Recent PLNT News
- PLANET FITNESS, INC. TO REPORT FIRST QUARTER 2024 RESULTS ON MAY 9, 2024 • PR Newswire (US) • 04/25/2024 12:00:00 PM
- Planet Fitness Names Colleen Keating Chief Executive Officer • PR Newswire (US) • 04/16/2024 12:45:00 PM
- /C O R R E C T I O N -- Planet Fitness, Inc./ • PR Newswire (US) • 02/22/2024 02:35:00 PM
- Form 8-K/A - Current report: [Amend] • Edgar (US Regulatory) • 02/22/2024 02:24:24 PM
- Planet Fitness Chief Financial Officer Tom Fitzgerald to Retire • PR Newswire (US) • 02/22/2024 11:32:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/22/2024 11:31:00 AM
- Planet Fitness, Inc. Announces Fourth Quarter and Year-End 2023 Results • PR Newswire (US) • 02/22/2024 11:30:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/20/2024 10:01:43 PM
- PLANET FITNESS, INC. TO REPORT FOURTH QUARTER 2023 RESULTS ON FEBRUARY 22, 2024 • PR Newswire (US) • 02/08/2024 01:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/08/2024 04:36:10 PM
- Planet Fitness Announces Key Year-End Metrics • PR Newswire (US) • 01/08/2024 01:00:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/05/2024 02:18:28 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/05/2024 02:03:48 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/05/2024 02:03:34 AM
- PLANET FITNESS, INC. ANNOUNCES UPCOMING CONFERENCE PARTICIPATION • PR Newswire (US) • 12/20/2023 01:00:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 12/08/2023 01:58:43 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 12/06/2023 10:40:23 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 12/06/2023 09:27:12 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 12/06/2023 09:26:56 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 11/09/2023 09:15:24 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/07/2023 11:30:38 AM
- Planet Fitness, Inc. Announces Third Quarter 2023 Results • PR Newswire (US) • 11/07/2023 11:30:00 AM
- Form 8-K/A - Current report: [Amend] • Edgar (US Regulatory) • 11/01/2023 09:24:49 PM
- PLANET FITNESS, INC. TO REPORT THIRD QUARTER 2023 RESULTS ON NOVEMBER 7, 2023 • PR Newswire (US) • 10/24/2023 12:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 10/18/2023 11:57:29 AM
NanoViricides Reports that the Phase I NV-387 Clinical Trial is Completed Successfully and Data Lock is Expected Soon • NNVC • May 2, 2024 10:07 AM
ILUS Files Form 10-K and Provides Shareholder Update • ILUS • May 2, 2024 8:52 AM
Avant Technologies Names New CEO Following Acquisition of Healthcare Technology and Data Integration Firm • AVAI • May 2, 2024 8:00 AM
Bantec Engaged in a Letter of Intent to Acquire a Small New Jersey Based Manufacturing Company • BANT • May 1, 2024 10:00 AM
Cannabix Technologies to Deliver Breath Logix Alcohol Screening Device to Australia • BLO • Apr 30, 2024 8:53 AM
Hydromer, Inc. Reports Preliminary Unaudited Financial Results for First Quarter 2024 • HYDI • Apr 29, 2024 9:10 AM