Basic-Fit is the biggest fitness gym operator in Europe. With over 1600 locations, it is nearly three times the size of its biggest competitor. This allows the company to position itself as the low-cost provider of a service most people usually choose based on cost and convenience. Think of it as the European Planet Fitness. But while Planet Fitness brings in $1.4B in revenue and has an $8.3B market cap, Basic-Fit is valued at only €1.7B on sales of €1.4B. Both companies made roughly 200 million in free cash flow in 2024 and neither is over-leveraged. So it looks like there is simply a huge US premium at work here.
Planet Fitness recovered from the pandemic long ago and its stock price is hovering around $100, not far from its $114.50 all-time high. Basic-Fit stock, on the other hand, has fallen back to March 2020 levels. So we think there is an opportunity here and the Elliott Wave chart below supports that idea.
It reveals that the recovery from the pandemic low of €10.50 up to €49 in November, 2021, is a five-wave impulse. We’ve labeled the pattern 1-2-3-4-5 in wave (1), where the five sub-waves of wave 3 are also visible and marked i-ii-iii-iv-v. Wave 4 was an a-b-c running flat correction. According to the theory, a three-wave correction follows every impulse.
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That’s exactly what happened to Basic-Fit. The stock took a three and a half years long plunge to €16.50 by April, 2025, before recovering to roughly €26 today. This correction can be seen as a W-X-Y double zigzag in wave (2), where wave ‘a’ of W is a leading diagonal and wave ‘b’ of Y is a triangle. If this count is correct, the bottom is finally in and it is time for the uptrend to resume in wave (3).
Before we conclude this analysis, nothing supports a prediction quite like seeing how a very similar situation has already played out. Here is a chart-by-chart comparison of Basic-Fit and Planet Fitness.
It might be just wishful thinking, but it looks like Basic-Fit is very closely following the lead of Planet Fitness. Both were in an uptrend prior to the pandemic and both plunged sharply once Covid-19 and social distancing arrived. Both then recovered sharply to new records by late-2021, before falling again. The only difference is the duration of that second big drop. It took a year and a half longer for Basic-Fit because of Europe’s much slower reopening. Planet Fitness seems to have already arrived where BFIT is now headed. If this analysis is correct, the latter could more than double to over €50 per share in the next couple of years. We’d view any further weakness in wave 2 of (3) towards €22 as a buying opportunity.
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Disclosure: The author holds a long position in BFIT stock in the EWM Interactive Stock Portfolio.
