Investors in Planet Fitness (NYSE:PLNT) have seen notable returns of 90% over the past five years

The main point of investing for the long term is to make money. Better yet, you'd like to see the share price move up more than the market average. But Planet Fitness, Inc. (NYSE:PLNT) has fallen short of that second goal, with a share price rise of 90% over five years, which is below the market return. However, more recent buyers should be happy with the increase of 54% over the last year.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

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To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over half a decade, Planet Fitness managed to grow its earnings per share at 7.5% a year. This EPS growth is slower than the share price growth of 14% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth. This optimism is visible in its fairly high P/E ratio of 48.41.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that Planet Fitness has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Planet Fitness' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that Planet Fitness shareholders have received a total shareholder return of 54% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 14% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Planet Fitness is showing 2 warning signs in our investment analysis , you should know about...

We will like Planet Fitness better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.