Latest news with #TheElevatorPitch
Yahoo
29-05-2025
- Business
- Yahoo
Planet Fitness, Inc. (PLNT): A Bull Case Theory
We came across a bullish thesis on Planet Fitness, Inc. (PLNT) on The Elevator Pitch's Substack. In this article, we will summarize the bulls' thesis on PLNT. Planet Fitness, Inc. (PLNT)'s share was trading at $104.8 as of 22nd May. PLNT's trailing and forward P/E were 49.67 and 35.97 respectively according to Yahoo Finance. A customer talking to a personal coach while working on their fitness goals in a modern gym. Planet Fitness (PLNT) is the leading US gym operator with about 20 million members, running an asset-light franchise model focused on the 'high-value low-price' (HVLP) segment. Its large, no-frills gyms offer clean, basic facilities at a low monthly fee of $15, attracting a broad customer base including beginners, students, and lower-income individuals. The company benefits from strong growth drivers like healthy aging, rising fitness awareness via social media, and GLP-1 weight-loss drugs encouraging exercise, which have increased gym membership penetration in the US. PLNT dominates the market, capturing roughly 90% of new members between 2011 and 2019 and holding a 30% share of total US gym-goers, far larger than competitors. With over 2,500 gyms, PLNT targets about 5% annual unit growth, carefully opening locations to avoid cannibalization. Pricing power is driven by its 'Black Card' membership, now 64% of members. Scale allows strong brand recognition and marketing, while recurring revenue from franchise royalties and equipment sales adds cash flow stability. Franchisees achieve EBITDA margins of 35-40%, like high-end hotels but with much lower startup costs. Despite recent CEO changes and a brief PR issue, Planet Fitness has shown resilience through recessions, delivering 18% revenue CAGR over the last decade. The asset-light model drives a group EBITDA margin near 40%, with improving free cash flow conversion and recovering ROIC expected to approach pre-pandemic levels above 25%. Though valuation is demanding at 20x EV/EBITDA, PLNT offers sticky revenue, growth potential, margin expansion, and international upside optionality. Planet Fitness, Inc. (PLNT) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held PLNT at the end of the fourth quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of PLNT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PLNT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
- Yahoo
Freshpet, Inc. (FRPT): A Bull Case Theory
We came across a bullish thesis on Freshpet, Inc. (FRPT) on Substack by Greg ┃The Elevator Pitch. In this article, we will summarize the bulls' thesis on FRPT. Freshpet, Inc. (FRPT)'s share was trading at $81.11 as of May 7th. FRPT's trailing and forward P/E were 270.37 and 78.12 respectively according to Yahoo Finance. guidocava/ Freshpet is reshaping the $54 billion U.S. pet food market by dominating the rapidly expanding fresh pet food segment with its premium, human-grade offerings and distinctive vertically integrated distribution strategy. Since pioneering the category in 2014, Freshpet has grown its market share in fresh pet food to a commanding 96%, while the segment itself has expanded from just 2% of the total pet food market to 4–6% today. The company's moat is built on its unique network of over 36,000 branded refrigerators placed in grocery and pet stores across the country—refrigerated infrastructure that not only reduces reliance on slotting fees but also ensures visibility and accessibility in high-traffic retail locations. This physical footprint gives Freshpet a durable advantage over competitors and enables a more profitable, high-margin product line for retailers. The brand has built strong customer loyalty by delivering visible health benefits for pets, such as improved energy, digestion, and breath. Given the challenges involved in switching a pet's diet, this leads to unusually high customer retention rates once conversion to fresh food occurs. Despite this enviable position, Freshpet's share price has significantly lagged, mostly due to past concerns over capacity bottlenecks and a softening end-market environment. However, these issues are now subsiding, and the company appears poised for a major operational and financial turning point. With enhanced manufacturing capabilities coming online, operating leverage is accelerating, and EBITDA is projected to compound at a 36% CAGR through 2027. Crucially, Freshpet is on the verge of producing sustainable free cash flow for the first time, yet its stock continues to trade approximately 45% below its recent highs. This disconnect between fundamentals and market sentiment offers an attractive entry point. While frozen, direct-to-consumer rivals like Farmer's Dog have gained some traction, their unit economics are weighed down by costly cold-chain logistics and a lack of scale profitability, reinforcing Freshpet's superior retail-based model. The broader landscape further supports Freshpet's dominance. The pet food market is largely controlled by incumbents like Mars and Nestlé, which have been reluctant to venture into the operational complexity of fresh offerings. Although Colgate-Palmolive's acquisition of Australia's Primo100 hints at renewed interest from major CPG players, replicating Freshpet's scale and infrastructure would require enormous investment. With nearly $1 billion in expected 2024 revenue and a sticky customer base, the company enjoys a rare mix of structural growth, staple-like defensiveness, and a defensible moat. Its valuation, currently at 22.1x EV/EBITDA on 2025 estimates, compares favorably to slower-growth peers like Colgate (22.9x) and Nestlé (20x). When viewed alongside high-growth, asset-intensive companies like Chipotle or CAVA, which trade at premium multiples, Freshpet appears undervalued given its trajectory. Supporting this thesis, a DCF model suggests substantial upside potential. Assuming management executes on its 2027 targets—including ramped capacity utilization and margin expansion to 24% EBIT—Freshpet could deliver roughly 35% upside from current levels, or 26% adjusting for dilution from convertible debt. This outlook positions Freshpet as a meaningful free cash flow generator with long-term re-rating potential as operational maturity is achieved. However, risks remain. The stock has been volatile, and its decline following a modest Q4 earnings miss—down nearly 20% in a single day—highlights investor sensitivity. The broader macro backdrop, including a weakening consumer environment, could also weigh on discretionary pet food spending. Competition is heating up, with Colgate's acquisition signaling that legacy players may eventually target the segment more aggressively. Additionally, the company's fortunes are closely tied to the leadership of Billy Cyr and Todd Thompson; any disruption in execution poses key man risk. Quality control is another critical area—any breach, even with a vertically integrated model, could damage brand equity and slow momentum. Activist activity has previously introduced uncertainty, with Jana Partners in 2022 pushing for a sale and triggering market instability. Still, the company successfully defended its independence and refinanced via convertible debt, preserving strategic flexibility. Overall, Freshpet represents a compelling investment opportunity within a niche that combines consumer brand loyalty, structural industry tailwinds, and meaningful operating leverage. With improving fundamentals, a loyal and growing customer base, and undervalued cash flow potential, the current stock price offers an asymmetric risk/reward setup for long-term investors. Freshpet, Inc. (FRPT) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held FRPT at the end of the fourth quarter which was 38 in the previous quarter. While we acknowledge the risk and potential of FRPT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FRPT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
13-05-2025
- Business
- Yahoo
Evolus, Inc. (EOLS): A Bull Case Theory
We came across a bullish thesis on Evolus, Inc. (EOLS) on Substack by Greg ┃The Elevator Pitch. In this article, we will summarize the bulls' thesis on EOLS. Evolus, Inc. (EOLS)'s share was trading at $11.76 as of May 7th. EOLS's forward P/E was 117.65 according to Yahoo Finance. ATeam/ Evolus has quickly positioned itself as a disruptive force in the global injectable aesthetics market, traditionally dominated by pharmaceutical giants like AbbVie and Galderma. The company's flagship product, Jeuveau, has gained significant traction, capturing 13% of the U.S. neuromodulator market within just five years. Jeuveau's success can be attributed to its innovative go-to-market strategy, which combines pharmaceutical credibility with direct-to-consumer (DTC) marketing techniques typically associated with the beauty industry. By offering Jeuveau at a price point approximately 20% below Botox, it has been able to resonate with a younger demographic, particularly those between the ages of 20 and 40. This pricing strategy, combined with a robust presence in over 16,000 medical practices—including a growing number of medical spas that lack strong brand loyalty—has made Jeuveau a popular alternative to Botox. This market acceptance has positioned Evolus favorably in the expanding U.S. injectables market, which is undergoing structural changes driven by greater societal acceptance, a wider demographic appeal, and an aging population with increasing disposable income. The broader U.S. injectables market is seeing strong growth, with the popularity of non-invasive cosmetic procedures accelerating. The U.S. is expected to follow more mature markets like Korea, where injectables are already deeply embedded in cosmetic routines. This trend represents a significant growth opportunity for Evolus, which is now at a crucial inflection point in its business development. The company plans to diversify beyond neuromodulators with the upcoming launch of Evolysse, a premium line of dermal fillers developed in partnership with Symatese, the same formulation partner behind Galderma's Restylane. Evolus is seeking FDA approval for several aesthetic indications, including lip and cheek enhancement. This expansion into dermal fillers is expected to contribute approximately $200 million to Evolus' revenue over time, further strengthening its position in the injectables space. Moreover, Evolus is adopting an innovative subscription-based model, 'Club Evolus,' which offers customers quarterly treatments for a monthly fee. This model is designed to drive customer loyalty and predictable revenue streams, providing a clear path to sustained growth. With these initiatives in play, Evolus is targeting annual revenue growth of 25-27%, with projections aiming for $700 million in revenue by 2028, up from an estimated $266 million in 2024. If the company achieves these goals, it expects to reach positive cash flow by 2026. However, despite its promising growth trajectory, Evolus remains a high-risk, high-reward investment. Several factors introduce uncertainty, including regulatory dependencies around product approvals and manufacturing partnerships. Additionally, since all Evolus procedures are out-of-pocket and not covered by insurance, the company's performance is sensitive to broader consumer spending trends. Economic downturns could impact discretionary spending on cosmetic procedures, presenting a potential headwind to growth. Still, if Evolus can continue executing its strategy effectively, maintain rational competition, and convert growth into sustainable profits, the company could deliver significant upside to investors. Furthermore, Evolus' ability to capture market share in the growing injectable aesthetics sector—through innovation, branding, and consumer loyalty—positions it as a compelling investment despite the inherent risks. Evolus stands out among its competitors, particularly Galderma, which, although boasting successful injectable brands like Dysport and Restylane, has a more diluted business model. Galderma also operates legacy divisions, including skincare products like Cetaphil, which is losing ground to competitors like L'Oréal's Cerave, and a dermatological drug pipeline that limits its growth potential. In contrast, Evolus offers a cleaner, more focused investment thesis, solely concentrating on injectable aesthetics. While it is still smaller and must prove long-term profitability, the simplicity of Evolus' business model and its focus on high-growth injectables makes it a more attractive pure-play investment in the sector. Valuing Evolus is complex due to the limited number of direct competitors, but looking at mature self-pay therapeutic companies like Align, Sonova, and Alcon—whose valuations range from 13-17x EV/EBITDA—can provide some context. If Evolus reaches $700 million in revenue by 2028 and delivers an 11% EBITDA margin, which is lower than its 20% long-term target but adjusted for stock-based compensation, the company would generate approximately $77 million in EBITDA. Using a 15x EV/EBITDA multiple, this could result in annualized returns of around 20%, contingent on continued growth. However, key risks remain. Evolus relies on licensing agreements for its neuromodulator Jeuveau from Daewoong and its fillers from Symatese, both of which come with volume requirements and finite durations. Any disruptions to these agreements could create a going concern issue for the company. Moreover, competition from South Korean entrants and a fragmented filler market pose additional risks. As competition intensifies, pricing pressures could erode margins, further complicating Evolus' growth strategy. Another risk comes from tariffs. New U.S. import duties on products from South Korea and France could impact Jeuveau and Evolysse fillers, though they may be exempt as pharmaceuticals. If tariffs do apply, Evolus may need to raise prices by 5-6% to offset the cost increases, which could be manageable given the strong margins and pricing power of its products. Competitors like AbbVie and Galderma may also face similar tariff-related challenges, potentially leveling the playing field. Despite these risks, Evolus benefits from a seasoned management team, including executives with deep experience from Allergan, such as CEO David Moatazedi and CMO Rui Avelar. This leadership, combined with a focused business model and significant upside potential, makes Evolus a standout investment in the injectable aesthetics space. While the company must prove its long-term profitability, its focused approach and market opportunities position it for potential substantial growth in a rapidly expanding industry. Evolus, Inc. (EOLS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held EOLS at the end of the fourth quarter which was 24 in the previous quarter. While we acknowledge the risk and potential of EOLS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than EOLS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
13-05-2025
- Business
- Yahoo
Evolus, Inc. (EOLS): A Bull Case Theory
We came across a bullish thesis on Evolus, Inc. (EOLS) on Substack by Greg ┃The Elevator Pitch. In this article, we will summarize the bulls' thesis on EOLS. Evolus, Inc. (EOLS)'s share was trading at $11.76 as of May 7th. EOLS's forward P/E was 117.65 according to Yahoo Finance. ATeam/ Evolus has quickly positioned itself as a disruptive force in the global injectable aesthetics market, traditionally dominated by pharmaceutical giants like AbbVie and Galderma. The company's flagship product, Jeuveau, has gained significant traction, capturing 13% of the U.S. neuromodulator market within just five years. Jeuveau's success can be attributed to its innovative go-to-market strategy, which combines pharmaceutical credibility with direct-to-consumer (DTC) marketing techniques typically associated with the beauty industry. By offering Jeuveau at a price point approximately 20% below Botox, it has been able to resonate with a younger demographic, particularly those between the ages of 20 and 40. This pricing strategy, combined with a robust presence in over 16,000 medical practices—including a growing number of medical spas that lack strong brand loyalty—has made Jeuveau a popular alternative to Botox. This market acceptance has positioned Evolus favorably in the expanding U.S. injectables market, which is undergoing structural changes driven by greater societal acceptance, a wider demographic appeal, and an aging population with increasing disposable income. The broader U.S. injectables market is seeing strong growth, with the popularity of non-invasive cosmetic procedures accelerating. The U.S. is expected to follow more mature markets like Korea, where injectables are already deeply embedded in cosmetic routines. This trend represents a significant growth opportunity for Evolus, which is now at a crucial inflection point in its business development. The company plans to diversify beyond neuromodulators with the upcoming launch of Evolysse, a premium line of dermal fillers developed in partnership with Symatese, the same formulation partner behind Galderma's Restylane. Evolus is seeking FDA approval for several aesthetic indications, including lip and cheek enhancement. This expansion into dermal fillers is expected to contribute approximately $200 million to Evolus' revenue over time, further strengthening its position in the injectables space. Moreover, Evolus is adopting an innovative subscription-based model, 'Club Evolus,' which offers customers quarterly treatments for a monthly fee. This model is designed to drive customer loyalty and predictable revenue streams, providing a clear path to sustained growth. With these initiatives in play, Evolus is targeting annual revenue growth of 25-27%, with projections aiming for $700 million in revenue by 2028, up from an estimated $266 million in 2024. If the company achieves these goals, it expects to reach positive cash flow by 2026. However, despite its promising growth trajectory, Evolus remains a high-risk, high-reward investment. Several factors introduce uncertainty, including regulatory dependencies around product approvals and manufacturing partnerships. Additionally, since all Evolus procedures are out-of-pocket and not covered by insurance, the company's performance is sensitive to broader consumer spending trends. Economic downturns could impact discretionary spending on cosmetic procedures, presenting a potential headwind to growth. Still, if Evolus can continue executing its strategy effectively, maintain rational competition, and convert growth into sustainable profits, the company could deliver significant upside to investors. Furthermore, Evolus' ability to capture market share in the growing injectable aesthetics sector—through innovation, branding, and consumer loyalty—positions it as a compelling investment despite the inherent risks. Evolus stands out among its competitors, particularly Galderma, which, although boasting successful injectable brands like Dysport and Restylane, has a more diluted business model. Galderma also operates legacy divisions, including skincare products like Cetaphil, which is losing ground to competitors like L'Oréal's Cerave, and a dermatological drug pipeline that limits its growth potential. In contrast, Evolus offers a cleaner, more focused investment thesis, solely concentrating on injectable aesthetics. While it is still smaller and must prove long-term profitability, the simplicity of Evolus' business model and its focus on high-growth injectables makes it a more attractive pure-play investment in the sector. Valuing Evolus is complex due to the limited number of direct competitors, but looking at mature self-pay therapeutic companies like Align, Sonova, and Alcon—whose valuations range from 13-17x EV/EBITDA—can provide some context. If Evolus reaches $700 million in revenue by 2028 and delivers an 11% EBITDA margin, which is lower than its 20% long-term target but adjusted for stock-based compensation, the company would generate approximately $77 million in EBITDA. Using a 15x EV/EBITDA multiple, this could result in annualized returns of around 20%, contingent on continued growth. However, key risks remain. Evolus relies on licensing agreements for its neuromodulator Jeuveau from Daewoong and its fillers from Symatese, both of which come with volume requirements and finite durations. Any disruptions to these agreements could create a going concern issue for the company. Moreover, competition from South Korean entrants and a fragmented filler market pose additional risks. As competition intensifies, pricing pressures could erode margins, further complicating Evolus' growth strategy. Another risk comes from tariffs. New U.S. import duties on products from South Korea and France could impact Jeuveau and Evolysse fillers, though they may be exempt as pharmaceuticals. If tariffs do apply, Evolus may need to raise prices by 5-6% to offset the cost increases, which could be manageable given the strong margins and pricing power of its products. Competitors like AbbVie and Galderma may also face similar tariff-related challenges, potentially leveling the playing field. Despite these risks, Evolus benefits from a seasoned management team, including executives with deep experience from Allergan, such as CEO David Moatazedi and CMO Rui Avelar. This leadership, combined with a focused business model and significant upside potential, makes Evolus a standout investment in the injectable aesthetics space. While the company must prove its long-term profitability, its focused approach and market opportunities position it for potential substantial growth in a rapidly expanding industry. Evolus, Inc. (EOLS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held EOLS at the end of the fourth quarter which was 24 in the previous quarter. While we acknowledge the risk and potential of EOLS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than EOLS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. 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