Shares of Planet Fitness (PLNT) surged in late morning trading after the fitness center company reported better-than-expected results for its second quarter and raised its outlook for the full fiscal year.

EARNINGS/GUIDANCE: After the market close yesterday, Planet Fitness reported Q2 adjusted earnings per share of 17c on revenue of $91.5M, beating analysts' estimates of 15c and $85.02M, respectively. System-wide same-store sales grew 7.6% in the quarter, the company added. Looking ahead, Planet Fitness revised its outlook for fiscal 2016, raising its FY16 adjusted EPS view to a range of 63c-66c from 62c-65c and revenue view to $366M-$372M from $360M-$370M. Analysts expect the company to report EPS of 65c and revenue of $366.3M. System-wide SSS are expected to grow in the high single digit range for the year.

EXECUTIVE COMMENTARY: Commenting on the quarter, Planet Fitness Chief Executive Officer Christopher Rondeau said that membership growth at the company's legacy stores as well as its recently opened locations are "fueling strong gains" in its high margin franchise segment. "We believe this trend will continue as our group of well capitalized franchisees is on schedule to open a record number of new stores this year and we continue to leverage the power of our national advertising fund to drive brand awareness," Rondeau added.

STREET RESEARCH: After the quarterly earnings report, Roth Capital analyst Dave King reiterated a Buy rating on Planet Fitness and raised his price target on the shares to $23 from $18, saying that the results exceeded estimates on "strong" growth across segments. King said that company appears to be set for continued growth through store expansion, gains in membership/store, conversions to higher-cost memberships and raises in average royalty rates. In addition, Cowen analyst Oliver Chen backed the firm's Outperform rating on the stock and raised his price target to $24 from $19. Chen said he is "encouraged" with regard to the company's opportunities to open more stores on the West Coast, which it has currently underpenetrated relative to the East Coast. The analyst also cited a compelling increasing royalty rate and benefits from the company's national ad campaign for the price target increase. Bank of America Merrill Lynch analyst Robert Ohmes also maintained a Buy rating on Planet Fitness with a $24 price target, noting that a premium multiple is justified for the stock given attractive industry trends, significant club growth opportunity, a differentiated business model, rapidly expanding margins and accelerating equipment segment growth.

PRICE ACTION: In late morning trading, Planet Fitness surged 12.8% to $22.93. Shares are up 46.6% year-to-date.

[Update: At Friday's close, PLNT was up 9.99%]