Business Corpus: This IBD 50 Stock Aims For Third Quarter Of Accelerating Earnings GrowthTop stock Planet Fitness earnings could show a third straight quarter of accelerating growth. late Thursday. The gym operator has boomed on its "judgement free zone" mantra and low fees. The post This IBD 50 Stock Aims For Third Quarter Of Accelerating Earnings Growth appeared first on Investor's Business Daily.

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Hot IBD 50 stock Planet Fitness (PLNT) could achieve a third straight quarter of accelerating earnings growth with Q2 results late Thursday.

Planet Fitness gyms have boomed by offering a "judgement free zone" and low membership fees.

Planet Fitness Earnings

Estimates: Wall Street expects Planet Fitness earnings to pump up 41% to 31 cents, according to Zacks Investment Research. That would be a slowdown from Q1's 42% EPS growth, but if Planet Fitness earnings top by a penny, it would be a 45% gain. Revenue is seen swelling 21% to $130 million.

Results & Outlook: Check back after the close.

Planet Fitness Stock

Stock: Shares were trading for 49.18 on the stock market today. Planet Fitness hit a record 50.73 on July 26.

The top stock has topped earnings estimates for the past nine quarters.

Planet Fitness stock boasts excellent fundamentals, which is reflected in its IBD Composite Rating of 96. In addition, it currently leads the Leisure-Services industry group.

But investors should not buy a stock on strong ratings alone. Planet Fitness is extended from any potential buy point. Also, it's risky to buy a stock just ahead of its earnings report. This is why IBD introduced an options strategy to limit risk around earnings. It lets investors capitalize on any post-earnings gains while capping potential losses.

Analysts Pumped About Planet Fitness

William Blair partner Sharon Zackfia wrote in a pre-earnings research note that she expects Planet Fitness to at least meet EPS views. She expects a revenue beat and an 8.5%-9% systemwide same-store sales gain. The analyst remains bullish on the stock.

"Planet Fitness' stock has risen over 40% year-to-date and is trading at an EV/EBITDA multiple of roughly 22 times our 2019 estimate," Zackfia said. "We view the valuation as sustainable given the potential for earnings upside, the stickiness of Planet's membership base with very low monthly dues, and the annuity-like nature and predictability afforded by a franchised, membership-based business model."

The analyst, who rates the stock as outperform, also believes membership trends are healthy. She predicted a midteens year-over-year increase to 12.1 million members.

Meanwhile D.A. Davidson analyst Michael Kawamoto said Planet Fitness could raise guidance. He also believes the recent end of the firm's exclusive contract with Life Fitness provides an opportunity.

"New equipment options will most likely provide a more personalized and connected experience for Planet Fitness members in the future," he said in a research note. "The company is currently testing multiple manufacturers over the next couple of years as it builds out its technology ecosystem. While this process will take some time to work through, we believe that the next generation of PLNT equipment (will) further differentiate the company's gym experience from competitors."

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The post This IBD 50 Stock Aims For Third Quarter Of Accelerating Earnings Growth appeared first on Investor's Business Daily.