Shares of Planet Fitness Inc PLNT were rising in early trading on Monday, a day ahead of the company reporting its fourth-quarter results.

The company’s price hikes for new members are likely to be accretive, resulting in a 2.1% upside to the current consensus EBITDA estimate for 2025, according to RBC Capital Markets.

The Planet Fitness Analyst: Logan Reich maintained an Outperform rating and price target of $120.

The Planet Fitness Thesis: After the company raised the price for its base membership for new members by 50% last year, there has been debate about whether the price hike could more than offset a decline in new members, Reich said in the note.

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RBC’s analysis suggests that the risk of a slowdown in new members is less than what is currently priced in, since only 3.6% of all Planet Fitness’ locations face competition from a cheaper competitor within a 1-mile radius, the analyst stated.

“And while 22% of PLNT locations had a cheaper competitor within a 5-mile radius, members typically only drive ~4 miles to a gym on average where driving just 2 miles further would be a 50% increase in driving time,” he wrote.

The analysis suggests consensus estimates could be raised by 1.2% for system sales and by 2.1% for EBITDA for 2025, Reich further said.

PLNT Price Action: Shares of Planet Fitness had risen by0.78% to $97.65 at the time of publication on Monday.

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