Analyzing Planet Fitness (NYSE:PLNT) and Royal Caribbean Cruises (NYSE:RCL)

Planet Fitness (NYSE:PLNT) and Royal Caribbean Cruises (NYSE:RCL) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Volatility and Risk

Planet Fitness has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Royal Caribbean Cruises has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500.

Profitability

This table compares Planet Fitness and Royal Caribbean Cruises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Planet Fitness	16.52%	-81.29%	8.66%
Royal Caribbean Cruises	24.36%	45.25%	11.13%

Institutional and Insider Ownership

95.5% of Planet Fitness shares are held by institutional investors. Comparatively, 87.5% of Royal Caribbean Cruises shares are held by institutional investors. 0.9% of Planet Fitness shares are held by company insiders. Comparatively, 6.4% of Royal Caribbean Cruises shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Planet Fitness and Royal Caribbean Cruises, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Planet Fitness	2	8	11	1	2.50
Royal Caribbean Cruises	0	6	14	1	2.76

Planet Fitness currently has a consensus price target of $77.81, suggesting a potential upside of 50.03%. Royal Caribbean Cruises has a consensus price target of $345.58, suggesting a potential upside of 7.01%. Given Planet Fitness’ higher probable upside, analysts plainly believe Planet Fitness is more favorable than Royal Caribbean Cruises.

Valuation & Earnings

This table compares Planet Fitness and Royal Caribbean Cruises”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Planet Fitness	$1.32 billion	3.11	$219.10 million	$2.77	18.72
Royal Caribbean Cruises	$17.94 billion	4.83	$4.27 billion	$16.39	19.70

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

Summary

Royal Caribbean Cruises beats Planet Fitness on 12 of the 14 factors compared between the two stocks.

About Planet Fitness

Planet Fitness, Inc., together with its subsidiaries, franchises and operates fitness centers under the Planet Fitness brand. The company operates through three segments: Franchise, Corporate-Owned Stores, and Equipment. The company is involved in franchising business in the United States, Puerto Rico, Canada, Panama, Mexico, and Australia. It engages in the sale of fitness equipment to franchisee-owned stores in the United States, Canada, and Mexico. In addition, the company operates corporate-owned stores in the United States and Canada. Planet Fitness, Inc. was founded in 1992 and is headquartered in Hampton, New Hampshire.

About Royal Caribbean Cruises

Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, which comprise a range of itineraries. As of February 21, 2024, it operated 65 ships. Royal Caribbean Cruises Ltd. was founded in 1968 and is headquartered in Miami, Florida.