Analyzing YogaWorks (YOGA) and Planet Fitness (PLNT)

YogaWorks (NASDAQ: YOGA) and Planet Fitness (NYSE:PLNT) are both cyclical consumer goods & services companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.

Insider and Institutional Ownership

2.3% of YogaWorks shares are held by institutional investors. 19.9% of Planet Fitness shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for YogaWorks and Planet Fitness, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
YogaWorks 0 1 5 0 2.83
Planet Fitness 0 1 9 0 2.90

YogaWorks currently has a consensus target price of $5.83, indicating a potential upside of 125.23%. Planet Fitness has a consensus target price of $29.67, indicating a potential downside of 1.37%. Given YogaWorks’ higher probable upside, equities research analysts plainly believe YogaWorks is more favorable than Planet Fitness.

Profitability

This table compares YogaWorks and Planet Fitness’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
YogaWorks -27.00% -48.95% -20.91%
Planet Fitness 11.44% -44.91% 6.44%

Valuation and Earnings

This table compares YogaWorks and Planet Fitness’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
YogaWorks $55.09 million 0.77 -$9.50 million ($1.07) -2.42
Planet Fitness $378.24 million 7.82 $21.50 million $0.66 45.58

Planet Fitness has higher revenue and earnings than YogaWorks. YogaWorks is trading at a lower price-to-earnings ratio than Planet Fitness, indicating that it is currently the more affordable of the two stocks.

Summary

Planet Fitness beats YogaWorks on 10 of the 12 factors compared between the two stocks.

YogaWorks Company Profile

YogaWorks, Inc. is a yoga instruction company. The Company provides yoga instruction in the United States with 50 company-owned studios as well as its Internet-based digital media service, MyYogaWorks.com. Its classes are designed to safely challenge practitioners of all levels, making yoga accessible to a diverse population ranging from beginners and casual practitioners to seasoned yogis and professional athletes. It offers a broad range of yoga disciplines and levels from fast-paced flow to soothing restorative and integrated fitness classes. The Company has brands in six geographically dispersed United States markets: Los Angeles, Orange County (California), New York City, Northern California, Boston and Baltimore/Washington D.C. It offers six months and annual prepaid memberships. It also offers private classes for those who wish to receive one-on-one instruction. As of March 31, 2017, the Company owned and operated 50 yoga studios.

Planet Fitness Company Profile

Planet Fitness, Inc. is a franchisor and operator of fitness centers in the United States. The Company operates through three segments: Franchise; Corporate-owned stores, and Equipment. The Franchise segment includes operations related to the Company’s franchising business in the United States, Puerto Rico, the Dominican Republic and Canada. The Corporate-owned stores segment includes operations with respect to all corporate-owned stores throughout the United States and Canada. The Equipment segment includes the sale of equipment to franchisee-owned stores. As of December 31, 2016, it had approximately 8.9 million members and 1,313 stores in 48 states, the District of Columbia, Puerto Rico, Canada and the Dominican Republic. Of its 1,313 stores, 1,255 were franchised and 58 are corporate-owned, as of December 31, 2016.

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