Planet Fitness (PLNT: NYSE)

Planet Fitness (PLNT) franchises and operates gyms and fitness centers. The business operates on an asset-light franchise model, with only 256 out of 2,575 locations owned by the company. This franchise model allows outside investors to front the start-up capital while paying fees to open Planet Fitness locations. This structure frees up company capital, contributing to positive free cash flow generation.

With a combined 18.7 million members across all locations, Planet Fitness can maintain its lowest membership fee at $10 per month. This low price attracts casual gym-goers who may only visit a few times a month but are reluctant to cancel their membership. This strategy helps keep the membership churn rate low, contributing to stable revenues.

Recently, Planet Fitness announced solid sales trends expected to continue through late September. Same-store sales rose by 8%, driven by the chain’s growing membership pool. Additionally, the company opened 26 new locations, boosting overall revenue by 14% to $278 million.

We are bullish on PLNT above $72.00-$73.00, with an upside target of $98.00-$100.00.

IMAX (IMAX: NYSE)

IMAX (IMAX) is a theater and tech platform for entertainment and events worldwide. CEO Rich Gelfond expressed optimism about the future, noting, “With the strikes and the lingering effects of the pandemic firmly behind us, we are in an excellent position to fully realize the benefits of our strong, asset-light business model.” Gelfond highlighted that system installations are up, and the company’s backlog continues to grow.

IMAX’s premium screens enable exhibitors to charge higher ticket prices, catering to moviegoers seeking immersive cinematic experiences. This premium viewing format is increasingly valuable as movie theater chains adapt to competition from streaming services. The success of blockbuster films like Top Gun: Maverick, which generated more than $1 billion in ticket sales, indicates that audiences remain eager for theatrical experiences.

As the theater business shifts towards big-budget, special-effects-heavy films that benefit from IMAX’s unique format, the company is poised to play a significant role in shaping the industry’s future.

We are bullish on IMAX above $19.00-$20.00, with an upside target of $30.00-$31.00.