Life Time Group Holdings (LTH) AI Stock Analysis

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Life Time Group Holdings

(NYSE:LTH)

72Outperform

Life Time Group Holdings has a solid financial performance with notable revenue and margin improvements. The positive outlook from the earnings call, including strong membership and revenue growth, supports a robust future trajectory. However, the high P/E ratio and potential macroeconomic sensitivities slightly temper the overall score.

Positive Factors

Digital Growth

The company's digital app has more than 1.7 million subscribers and is growing rapidly, which could exceed 3 million by the end of the next fiscal year.

Financial Performance

LTH reached the high end of their preliminary revenue guidance and exceeded profitability metrics expectations, indicating strong financial performance.

Member Retention

The company has set new records in member retention and in-center revenue, reflecting strong business momentum.

Negative Factors

Macroeconomic Factors

LTH is a premium gym operator catering to higher income demographics, which are expected to be more resilient in the current macroeconomic environment.

Pricing Challenges

There is a significant embedded pricing opportunity as membership demand exceeds desired capacity.

Life Time Group Holdings (LTH) vs. S&P 500 (SPY)

Market Cap

$6.68B

Dividend YieldN/A

Average Volume (3M)2.76M

Price to Earnings (P/E)43.0

Beta (1Y)1.31

Revenue Growth18.24%

EPS Growth99.18%

CountryUS

Employees9,000

SectorConsumer Cyclical

Sector Strength63

IndustryLeisure

Share Statistics

EPS (TTM)0.74

Shares Outstanding209,616,030

10 Day Avg. Volume2,655,368

30 Day Avg. Volume2,761,410

Financial Highlights & Ratios

PEG Ratio0.43

Price to Book (P/B)N/A

Price to Sales (P/S)2.45

Price to Cash Flow (P/CF)9.90

P/FCF Ratio14.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$35.30

Price Target Upside13.03% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering12

Life Time Group Holdings Business Overview & Revenue Model

Company DescriptionLife Time Group Holdings, Inc. (LTH) is a company that operates a chain of health, fitness, and wellness centers across the United States and Canada. The company offers an array of amenities and services, including fitness classes, personal training, sports programs, and spa services, designed to support holistic wellness and healthy living. Life Time is committed to providing a comprehensive lifestyle experience, with its facilities serving as community hubs for fitness enthusiasts and families alike.

How the Company Makes MoneyLife Time Group Holdings generates revenue primarily through membership subscriptions, which provide access to its fitness and wellness centers and the various services and amenities offered therein. In addition to membership fees, the company earns money from personal training services, spa and salon services, and the sale of food and beverages. Life Time also hosts athletic events and programs, which can contribute to additional revenue streams. The company may engage in partnerships or sponsorships that align with its brand and wellness-focused mission, further enhancing its revenue potential. Real estate development associated with its centers can also play a role in its financial strategy.

Life Time Group Holdings Financial Statement Overview

Summary

Life Time Group Holdings shows strong revenue growth and improved leverage management. The company improved its gross profit margin significantly and turned its cash flow from negative to positive. However, there is still room for improvement in profitability margins and return on equity.

Income Statement

Positive

Life Time Group Holdings has shown a consistent revenue growth trajectory with a notable increase in total revenue year-over-year. The gross profit margin has significantly improved from 32% in 2023 to 88% in 2024, indicating a more efficient cost structure. The net profit margin improved from 3% in 2023 to 6% in 2024, reflecting better profitability. However, the EBIT and EBITDA margins suggest room for improvement in operational efficiency.

Balance Sheet

Positive

The company's debt-to-equity ratio improved from 1.89 in 2023 to 0.95 in 2024, signifying better leverage management. The equity ratio increased slightly, indicating a stronger balance sheet. However, the return on equity remains moderate, suggesting that while leverage has improved, profitability could still be enhanced further.

Cash Flow

Positive

Life Time Group Holdings demonstrated a turnaround in free cash flow from negative in 2023 to positive in 2024, a strong indicator of improved cash generation capacity. The operating cash flow to net income ratio is robust, showcasing effective cash flow management. Yet, the free cash flow to net income ratio reveals potential for further optimization.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.62B	2.22B	1.82B	1.32B	948.38M
	Gross Profit
2.32B	708.96M	754.35M	473.95M	288.33M
	EBIT
357.48M	233.18M	110.62M	-495.19M	-359.15M
	EBITDA
632.16M	469.98M	339.50M	-260.07M	-111.64M
	Net Income Common Stockholders
156.24M	76.06M	-1.79M	-579.37M	-360.19M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
27.88M	29.97M	25.51M	31.64M	33.20M
	Total Assets
7.15B	7.03B	6.63B	6.26B	6.02B
	Total Debt
2.47B	4.26B	4.04B	3.76B	4.06B
	Net Debt
2.45B	4.23B	4.01B	3.72B	4.03B
	Total Liabilities
4.54B	4.78B	4.50B	4.17B	4.54B
	Stockholders Equity
2.61B	2.25B	2.12B	2.09B	1.48B
Cash Flow		Free Cash Flow
50.58M	-230.90M	-390.21M	-348.94M	-361.60M
	Operating Cash Flow
575.12M	463.00M	200.97M	-20.03M	-95.98M
	Investing Cash Flow
-292.74M	-574.16M	-243.54M	-269.92M	-6.12M
	Financing Cash Flow
-284.38M	115.55M	36.80M	288.40M	87.39M

Life Time Group Holdings Technical Analysis

Technical Analysis Sentiment

Positive

Last Price31.23

Price Trends

50DMA

30.72

Positive

100DMA

27.71

Positive

200DMA

25.40

Positive

Market Momentum

MACD

0.19

Negative

RSI

57.98

Neutral

STOCH

95.53

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LTH, the sentiment is Positive. The current price of 31.23 is above the 20-day moving average (MA) of 30.62, above the 50-day MA of 30.72, and above the 200-day MA of 25.40, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 57.98 is Neutral, neither overbought nor oversold. The STOCH value of 95.53 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LTH.

Life Time Group Holdings Risk Analysis

Life Time Group Holdings disclosed 32 risk factors in its most recent earnings report. Life Time Group Holdings reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Life Time Group Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LTH	72 Outperform	$6.68B	43.01	6.42%	―	18.24%	99.18%
MTN	71 Outperform	$5.32B	20.91	38.12%	6.25%	3.57%	13.75%
HGV	67 Neutral	$3.14B	70.91	2.43%	―	25.21%	-83.25%
PLNT	61 Neutral	$8.23B	48.65	-79.88%	―	10.30%	23.45%
CHDN	60 Neutral	$7.47B	17.89	42.87%	0.40%	11.07%	3.32%
Sector *	59 Neutral	$11.53B	10.43	-0.22%	4.02%	1.19%	-15.83%
CZR	46 Neutral	$5.36B	―	-6.38%	―	-2.45%	-135.17%

* Consumer Cyclical Sector Average

Performance Comparison

LTH

Life Time Group Holdings

32.07

17.87

125.85%

CHDN

Churchill Downs

102.63

-21.11

-17.06%

MTN

Vail Resorts

140.17

-72.38

-34.05%

CZR

Caesars Entertainment

25.07

-14.37

-36.44%

PLNT

Planet Fitness

96.16

35.40

58.26%

HGV

Hilton Grand Vacations

33.10

-10.12

-23.42%

Life Time Group Holdings Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -1.20% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Positive

The earnings call conveyed a strong positive outlook with substantial growth in revenue, memberships, and net income. The company demonstrated effective debt management and laid out plans for future expansion and digital growth. Despite acknowledging potential economic challenges and dependency on real estate transactions, the overall performance and strategic positioning suggest a robust business trajectory.

Highlights

Strong Revenue Growth

Total revenue for Q4 2024 increased 18.7% to $663.3 million, and for the full year, revenue increased 18.2% to $2.621 billion.

Membership and Revenue Per Membership Growth

Center memberships increased 6.4% year-over-year to over 812,000, with total memberships at approximately 866,000. Average monthly dues rose by 10%, and average revenue per center membership increased 12% from the prior year quarter.

Impressive Net Income and EBITDA Growth

Net income for Q4 2024 rose by 57% to $37.2 million, and adjusted net income increased by 59% to $60.3 million. Adjusted EBITDA grew 28.5% to $177 million, with a margin increase of 210 basis points.

Successful Debt Management and Cash Flow

Net cash provided by operating activities increased by 24% to $163 million. The company maintained a net debt leverage ratio of 2.28 times and expects further reduction.

Expansion and Future Growth Prospects

Life Time plans to open 10 to 12 clubs in 2025, with a robust pipeline for 2026 and 2027. The new club pipeline is strong, and the company intends to maintain current debt levels while growing revenue and EBITDA.

Digital and Product Expansion

LT Digital subscriptions reached over 1.7 million, growing by over 100,000 subscribers per month. LTH nutritional supplements experienced strong month-over-month growth.

Lowlights

Potential Economic Sensitivity

There is acknowledgment of potential macroeconomic compression which may impact growth, although the company feels prepared to handle such scenarios.

Dependency on Sale-Leaseback for Expansion

The company plans to rely significantly on sale-leaseback agreements to fund new club openings, highlighting potential exposure to real estate market conditions.

Company Guidance

During the Q4 2024 earnings call for Life Time Group Holdings, Inc., the company provided an optimistic outlook for 2025, raising both revenue and adjusted EBITDA guidance. The revised revenue guidance is now projected at $2.925 billion to $2.975 billion, with adjusted EBITDA expected between $780 million and $800 million. The company highlighted a strong 2024 performance, with total revenue increasing by 18.2% to $2.621 billion and net income rising by 105% to $156.2 million. They achieved an adjusted EBITDA margin of 25.8%, up 160 basis points from the previous year. Membership growth was robust, with center memberships rising 6.4% to over 812,000, contributing to a total membership of approximately 866,000 when including digital on-hold memberships. The average monthly dues increased by 10% to $201, and average revenue per center membership grew by 12% to $796. The company also emphasized strategic expansion plans, anticipating the opening of 10 to 12 new clubs in 2025, supported by a robust pipeline and disciplined capital allocation, including maintaining debt levels at approximately $1.5 billion. Additionally, Life Time is focused on leveraging asset-light growth opportunities, such as their digital platform, LT Digital, which has rapidly grown to 1.7 million subscribers and is projected to continue expanding by over 100,000 subscribers per month.

Life Time Group Holdings Corporate Events

Business Operations and StrategyFinancial Disclosures

Life Time Group Holdings Reports Strong Q3 2024 Results

Positive

Oct 15, 2024

Life Time Group Holdings reported a robust financial performance for Q3 2024, with total revenue estimated at $693.2 million, marking an 18.5% increase from the previous year. The company’s net income surged by 422.5% to $41.4 million, while adjusted EBITDA rose by 26.1% to $180.3 million. Life Time also reduced its net debt leverage ratio to 2.4x and expects positive free cash flow for a consecutive quarter, highlighting its strong financial health and strategic refinancing plans.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.