Is Planet Fitness, Inc. (NYSE:PLNT) Trading At A 27% Discount?
Is Planet Fitness, Inc. (NYSE:PLNT) Trading At A 27% Discount?
Key Insights
- The projected fair value for Planet Fitness is US$78.24 based on 2 Stage Free Cash Flow to Equity
- Planet Fitness is estimated to be 27% undervalued based on current share price of US$56.91
- Our fair value estimate is 4.2% higher than Planet Fitness' analyst price target of US$75.06
How far off is Planet Fitness, Inc. (NYSE:PLNT) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. This will be done using the Discounted Cash Flow (DCF) model. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine.
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you.
What's The Estimated Valuation?
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value:
10-year free cash flow (FCF) estimate
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF ($, Millions) | US$195.8m | US$244.4m | US$360.0m | US$412.0m | US$456.5m | US$494.2m | US$526.1m | US$553.5m | US$577.5m | US$599.0m |
Growth Rate Estimate Source | Analyst x5 | Analyst x5 | Analyst x2 | Est @ 14.45% | Est @ 10.80% | Est @ 8.25% | Est @ 6.46% | Est @ 5.21% | Est @ 4.33% | Est @ 3.72% |
Present Value ($, Millions) Discounted @ 8.6% | US$180 | US$207 | US$281 | US$296 | US$302 | US$301 | US$295 | US$285 | US$274 | US$262 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = US$2.7b
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.3%. We discount the terminal cash flows to today's value at a cost of equity of 8.6%.
Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = US$599m× (1 + 2.3%) ÷ (8.6%– 2.3%) = US$9.7b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$9.7b÷ ( 1 + 8.6%)10= US$4.2b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$6.9b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$56.9, the company appears a touch undervalued at a 27% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
Important Assumptions
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Planet Fitness as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.6%, which is based on a levered beta of 1.380. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
SWOT Analysis for Planet Fitness
- Earnings growth over the past year exceeded the industry.
- Debt is well covered by earnings.
- Balance sheet summary for PLNT.
- No major weaknesses identified for PLNT.
- Annual earnings are forecast to grow faster than the American market.
- Trading below our estimate of fair value by more than 20%.
- Debt is not well covered by operating cash flow.
- Total liabilities exceed total assets, which raises the risk of financial distress.
- Revenue is forecast to grow slower than 20% per year.
- Is PLNT well equipped to handle threats?
Moving On:
Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize for a company. DCF models are not the be-all and end-all of investment valuation. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Why is the intrinsic value higher than the current share price? For Planet Fitness, we've compiled three relevant elements you should consider:
- Risks: Case in point, we've spotted 2 warning signs for Planet Fitness you should be aware of.
- Future Earnings: How does PLNT's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks just search here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
關鍵見解
- 根據兩階段自由現金流向股本計算,Planet Fitness的預計公允價值爲78.24美元
- 根據目前的56.91美元股價,Planet Fitness的估值估計被低估了27%
- 我們的公允價值估計比Planet Fitness的分析師目標股價75.06美元高4.2%
Planet Fitness, Inc.(紐約證券交易所代碼:PLNT)距離其內在價值有多遠?使用最新的財務數據,我們將通過估算公司未來的現金流並將其折扣爲現值來研究股票的定價是否公平。這將使用折扣現金流 (DCF) 模型來完成。在你認爲自己無法理解之前,請繼續閱讀!實際上,它沒有你想象的那麼複雜。
但請記住,估算公司價值的方法有很多,而差價合約只是一種方法。對於那些熱衷於股票分析的人來說,你可能會對這裏的Simply Wall St分析模型感興趣。
估計估值是多少?
我們使用所謂的兩階段模型,這僅意味着公司的現金流有兩個不同的增長期。通常,第一階段是較高的增長階段,第二階段是較低的增長階段。首先,我們必須估算出未來十年的現金流。在可能的情況下,我們會使用分析師的估計值,但是當這些估計值不可用時,我們會從最新的估計值或報告的價值中推斷出之前的自由現金流(FCF)。我們假設自由現金流萎縮的公司將減緩其萎縮速度,而自由現金流不斷增長的公司在此期間的增長率將放緩。我們這樣做是爲了反映早期增長的放緩幅度往往比後來的幾年更大。
通常,我們假設今天的一美元比未來一美元更有價值,因此這些未來現金流的總和將折現爲今天的價值:
10 年自由現金流 (FCF) 估計
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF(美元,百萬) | 1.958 億美元 | 2.444 億美元 | 3.600 億美元 | 4.120 億美元 | 456.5 億美元 | 494.2 億美元 | 5.261 億美元 | 553.5 億美元 | 577.5 億美元 | 599.0 億美元 |
增長率估算來源 | 分析師 x5 | 分析師 x5 | 分析師 x2 | 美國東部時間 @ 14.45% | 美國東部時間 @ 10.80% | 美國東部標準時間 @ 8.25% | Est @ 6.46% | Est @ 5.21% | Est @ 4.33% | Est @ 3.72% |
現值(美元,百萬)折扣 @ 8.6% | 180 美元 | 207 美元 | 281 美元 | 296 美元 | 302 美元 | 301 美元 | 295 美元 | 285 美元 | 274 美元 | 262 美元 |
(“Est” = Simply Wall St估計的FCF增長率)
十年期現金流(PVCF)的現值 = 27億美元
第二階段也稱爲終值,這是第一階段之後的企業現金流。戈登增長公式用於計算終值,其未來年增長率等於10年期國債收益率2.3%的5年平均水平。我們將終端現金流折現爲今天的價值,股本成本爲8.6%。
終端價值 (TV) = FCF2033 × (1 + g) ÷ (r — g) = 5.99 億美元× (1 + 2.3%) ÷ (8.6% — 2.3%) = 97億美元
終端價值的現值 (PVTV) = 電視/ (1 + r)10= 97億美元÷ (1 + 8.6%)10= 42 億美元
因此,總價值或權益價值是未來現金流現值的總和,在本例中爲69億美元。在最後一步中,我們將股票價值除以已發行股票的數量。相對於目前的56.9美元的股價,該公司的估值似乎略有低估,與目前的股價相比折扣了27%。但請記住,這只是一個近似的估值,就像任何複雜的公式一樣,垃圾進出。
重要假設
我們要指出的是,貼現現金流的最重要投入是貼現率,當然還有實際的現金流。你不必同意這些輸入,我建議你自己重做計算然後試一試。DCF也沒有考慮一個行業可能的週期性,也沒有考慮公司未來的資本需求,因此它沒有全面反映公司的潛在表現。鑑於我們將Planet Fitness視爲潛在股東,因此使用權益成本作爲貼現率,而不是構成債務的資本成本(或加權平均資本成本,WACC)。在此計算中,我們使用了8.6%,這是基於1.380的槓桿測試版。Beta是衡量股票與整個市場相比波動性的指標。我們的測試版來自全球可比公司的行業平均貝塔值,設定在0.8到2.0之間,這是一個穩定的業務的合理範圍。
星球健身的 SWOT 分析
- 過去一年的收益增長超過了該行業。
- 債務可以很好地由收益支付。
- PLNT 的資產負債表摘要。
- 沒有發現PLNT的主要弱點。
- 預計年收入的增長速度將快於美國市場。
- 交易價格比我們估計的公允價值低20%以上。
- 運營現金流無法很好地覆蓋債務。
- 總負債超過總資產,這增加了財務困境的風險。
- 預計收入每年增長將低於20%。
- PLNT 有足夠的能力應對威脅嗎?
繼續前進:
儘管公司的估值很重要,但理想情況下,它不會是你仔細檢查公司的唯一分析內容。DCF模型並不是投資估值的萬能藥。相反,DCF模型的最佳用途是測試某些假設和理論,看看它們是否會導致公司被低估或高估。例如,公司權益成本或無風險利率的變化會對估值產生重大影響。爲什麼內在價值高於當前股價?對於Planet Fitness,我們整理了你應該考慮的三個相關要素:
- 風險:舉個例子,我們發現了兩個你應該注意的Planet Fitness警告信號。
- 未來收益:與同行和整個市場相比,PLNT的增長率如何?通過與我們的免費分析師增長預期圖表互動,深入了解未來幾年的分析師共識數字。
- 其他穩健的業務:低債務、高股本回報率和良好的過去表現是強大業務的基礎。爲什麼不瀏覽我們具有堅實業務基礎的股票互動清單,看看是否還有其他你可能沒有考慮過的公司!
PS。Simply Wall St應用程序每天對紐約證券交易所的每隻股票進行折扣現金流估值。如果您想找到其他股票的計算方法,請在此處搜索。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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