Analyzing Planet Fitness (NYSE:PLNT) and Churchill Downs (NASDAQ:CHDN)

Churchill Downs (NASDAQ:CHDN) and Planet Fitness (NYSE:PLNT) are both mid-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, dividends, risk and profitability.

Earnings and Valuation

This table compares Churchill Downs and Planet Fitness”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Churchill Downs	$2.99 billion	2.13	$383.00 million	$5.83	15.67
Planet Fitness	$1.41 billion	2.88	$219.10 million	$2.95	18.24

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

Insider and Institutional Ownership

82.6% of Churchill Downs shares are held by institutional investors. Comparatively, 95.5% of Planet Fitness shares are held by institutional investors. 5.9% of Churchill Downs shares are held by company insiders. Comparatively, 0.9% of Planet Fitness shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Churchill Downs and Planet Fitness’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Churchill Downs	13.82%	42.16%	6.31%
Planet Fitness	16.88%	-59.46%	8.60%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Churchill Downs and Planet Fitness, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Churchill Downs	1	0	9	0	2.80
Planet Fitness	1	9	11	1	2.55

Churchill Downs presently has a consensus target price of $136.88, indicating a potential upside of 49.78%. Planet Fitness has a consensus target price of $70.24, indicating a potential upside of 30.53%. Given Churchill Downs’ stronger consensus rating and higher possible upside, research analysts plainly believe Churchill Downs is more favorable than Planet Fitness.

Volatility & Risk

Churchill Downs has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, Planet Fitness has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Summary

Planet Fitness beats Churchill Downs on 8 of the 15 factors compared between the two stocks.

About Churchill Downs

Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company in the United States. It operates through three segments: Live and Historical Racing, TwinSpires, and Gaming. The company operates pari-mutuel gaming entertainment venues; TwinSpires, an online wagering platform for horse racing, sports, and iGaming; retail sports books; casino gaming; and Terre Haute Casino Resort. It also offers streaming video of live horse races, replays, and an assortment of racing and handicapping information; and provides the Bloodstock Research Information Services platform for horse racing statistical data. In addition, the company manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities, and other pari-mutuel wagering businesses. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky.

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.