Reviewing Planet Fitness (NYSE:PLNT) & Good Times Restaurants (NASDAQ:GTIM)

Planet Fitness (NYSE:PLNT) and Good Times Restaurants (NASDAQ:GTIM) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, institutional ownership and analyst recommendations.

Profitability

This table compares Planet Fitness and Good Times Restaurants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Planet Fitness	16.88%	-59.46%	8.60%
Good Times Restaurants	1.65%	6.47%	2.73%

Institutional and Insider Ownership

95.5% of Planet Fitness shares are owned by institutional investors. Comparatively, 12.1% of Good Times Restaurants shares are owned by institutional investors. 0.9% of Planet Fitness shares are owned by insiders. Comparatively, 26.5% of Good Times Restaurants shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Planet Fitness and Good Times Restaurants, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Planet Fitness	1	9	11	1	2.55
Good Times Restaurants	1	0	0	0	1.00

Planet Fitness presently has a consensus price target of $71.87, indicating a potential upside of 17.66%. Given Planet Fitness’ stronger consensus rating and higher probable upside, analysts clearly believe Planet Fitness is more favorable than Good Times Restaurants.

Valuation and Earnings

This table compares Planet Fitness and Good Times Restaurants”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Planet Fitness	$1.32 billion	3.48	$219.10 million	$2.95	20.70
Good Times Restaurants	$141.63 million	0.09	$1.02 million	$0.21	5.95

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

Risk and Volatility

Planet Fitness has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Good Times Restaurants has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Summary

Planet Fitness beats Good Times Restaurants on 13 of the 15 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 Good Times Restaurants

Good Times Restaurants Inc., through its subsidiaries, engages in the restaurant business in the United States. It operates and franchises Good Times Burgers & Frozen Custard, an upscale quick-service drive-through dining restaurant; and owns, operates, franchises, and licenses Bad Daddy's Burger Bar, a full-service upscale casual dining restaurant. The company was incorporated in 1987 and is based in Golden, Colorado.