Life Time Group Holdings, Inc.
LTH
$43.51
-1.89%
Life Time Group Holdings, Inc. is a lifestyle and leisure brand that designs, builds, and operates large, multi-use sports, athletic, fitness, family recreation, and spa centers in a resort-like environment, primarily in residential areas of U.S. and Canadian metropolitan markets. As a leading operator in the premium health and wellness niche, Life Time differentiates itself through its upscale, comprehensive club experience and a strong membership community. The current investor narrative centers on the company's robust post-pandemic recovery, evidenced by accelerating revenue growth and margin expansion, alongside a strategic focus on expanding its footprint and enhancing digital engagement. Recent analyst actions, including upgrades from Morgan Stanley and Guggenheim, reflect growing confidence in the company's growth trajectory and operational execution.…
LTH
Life Time Group Holdings, Inc.
$43.51
Investment Opinion: Should I buy LTH Today?
Based on the analysis, Life Time is rated a Buy. The company demonstrates strong revenue growth (12.3% YoY), improving margins (net margin 16.5%), and a compelling valuation (trailing P/E 15.54x vs. industry 22x). Analyst consensus is Strong Buy with an average target of $54.43, implying 20.3% upside. The stock's momentum is robust, with a 65.1% gain over the past year.
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LTH 12-Month Price Forecast
The AI assessment is bullish, given the strong growth and valuation support. However, confidence is medium due to the high debt and negative free cash flow. The stock's momentum and analyst sentiment are positive, but the financial leverage and liquidity concerns warrant caution. If the company can sustain growth and improve cash flow, the stock could outperform. A downgrade would occur if revenue growth falls below 10% or if debt levels become unsustainable.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Life Time Group Holdings, Inc.'s 12-month outlook, with a consensus price target around $55.43 and implied upside of +27.4% versus the current price.
Average Target
$55.43
0 analysts
Implied Upside
+27.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$48 - $64
Analyst target range
Life Time is covered by 14 analysts, with a consensus recommendation of 'Strong Buy' (mean rating of 1.14 on a 1-5 scale where 1 is Strong Buy). The average target price is $54.43, implying an upside of 20.3% from the current price of $45.26. The distribution of ratings is heavily bullish, with no sell ratings and only a few holds, reflecting strong institutional confidence. The target price range spans from a low of $39.00 to a high of $64.00, indicating a wide dispersion of expectations. The high target of $64.00 suggests that some analysts anticipate significant multiple expansion or accelerated growth, possibly driven by new club openings and increased membership penetration. The low target of $39.00 implies a downside of 13.8%, which could be triggered by margin compression, competitive pressures, or a slowdown in consumer spending. Recent rating actions include upgrades from Morgan Stanley (from Equal Weight to Overweight in October 2025) and reaffirmations of Buy ratings from Guggenheim, while Goldman Sachs maintains a Neutral stance. The wide target spread (25 points) signals high uncertainty about the company's future performance, but the overall bullish sentiment and recent upgrades suggest a positive outlook.
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Bulls vs Bears: LTH Investment Factors
Life Time exhibits strong growth and improving profitability, with revenue up 12.3% YoY and net margin expanding to 16.5%. The stock trades at a discount to its industry on a trailing P/E basis, and analysts are overwhelmingly bullish with a Strong Buy consensus and 20.3% upside to the average target. However, high debt, negative free cash flow, and a low current ratio pose financial risks. The key tension is whether the company's aggressive expansion will continue to drive growth and margins, or if the debt burden and liquidity constraints will become problematic. Currently, the bull case is stronger given the robust operational performance and analyst support, but the sustainability of growth and financial health are critical to monitor.
Bullish
- Strong Revenue Growth: Revenue grew 12.3% YoY to $745.1M in Q4 2025, with consistent double-digit growth over the past year (18.3% in Q1, 14.0% in Q2, 12.9% in Q3). This demonstrates robust demand for premium fitness experiences.
- Margin Expansion: Net margin improved from 5.6% in Q4 2024 to 16.5% in Q4 2025, while operating margin rose from 13.1% to 17.4%. This shows strong operational leverage and cost discipline.
- Analyst Consensus Strong Buy: With a mean rating of 1.14 (Strong Buy) and an average target price of $54.43, analysts see 20.3% upside from the current price of $45.26. Recent upgrades from Morgan Stanley and Guggenheim reinforce positive sentiment.
- Attractive Valuation: Trailing P/E of 15.54x is below the industry average of 22x and near the lower end of its historical range (11.9x-94.2x). The PEG ratio of 0.13 suggests the stock is undervalued relative to its growth rate.
Bearish
- High Debt Levels: Debt-to-equity ratio is 2.16, indicating significant leverage. This increases financial risk, especially if interest rates remain high or cash flows weaken.
- Negative Free Cash Flow: Free cash flow was -$64.6M in Q4 2025 due to heavy capital expenditures of $304.5M for expansion. This could pressure liquidity if growth investments don't yield expected returns.
- Liquidity Concerns: Current ratio of 0.63 suggests potential difficulty in meeting short-term obligations. This is a red flag for financial stability.
- Revenue Growth Deceleration: YoY growth slowed from 18.3% in Q1 2025 to 12.3% in Q4 2025. If this trend continues, it could lead to downward earnings revisions.
LTH Technical Analysis
Life Time's stock has exhibited a powerful sustained uptrend over the past year, with a 1-year price change of +65.12%, significantly outperforming the S&P 500's +20.37% over the same period. The current price of $45.26 sits near the upper end of its 52-week range, at approximately 95.8% of the range (calculated as (45.26 - 24.14) / (47.235 - 24.14) = 0.958). This positioning near the highs indicates strong momentum and investor optimism, though it also raises the risk of overextension and a potential pullback.
Beta
1.50
1.50x market volatility
Max Drawdown
-16.3%
Largest decline past year
52-Week Range
$24-$47
Price range past year
Annual Return
+55.0%
Cumulative gain past year
| Period | LTH Return | S&P 500 |
|---|---|---|
| 1m | -4.8% | +5.5% |
| 3m | +31.5% | +1.7% |
| 6m | +61.1% | +12.2% |
| 1y | +55.0% | +18.6% |
| ytd | +63.0% | +12.8% |
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LTH Fundamental Analysis
Life Time's revenue trajectory is robustly growing, with the most recent quarter (Q4 2025) reporting revenue of $745.1 million, a 12.33% YoY increase from $663.3 million in Q4 2024. This growth is part of a multi-quarter acceleration, as revenue has risen from $596.7 million in Q1 2024 to $745.1 million in Q4 2025, with YoY growth rates of 18.3% in Q1 2025, 14.0% in Q2 2025, 12.9% in Q3 2025, and 12.3% in Q4 2025, indicating a slight deceleration but still strong double-digit expansion. The growth is driven primarily by membership revenue, which constitutes $535.1 million (71.8% of total) in the latest quarter, while in-center revenue of $191.2 million and product/service revenue of $18.8 million contribute the remainder. The company's profitability is solid, with net income of $123.0 million in Q4 2025, up from $37.2 million in Q4 2024, and a net margin of 16.5% (vs. 5.6% a year ago). Gross margin has expanded to 47.6% (as per valuation data) from 48.2% in Q4 2024, while operating margin improved to 17.4% from 13.1%, reflecting operational leverage. Balance sheet leverage is high, with a debt-to-equity ratio of 2.16 and a current ratio of 0.63, indicating potential liquidity concerns. However, operating cash flow of $239.9 million in Q4 2025 is strong, though free cash flow was negative at -$64.6 million due to heavy capital expenditures of $304.5 million for expansion. ROE stands at 11.95%, and the company's FCF yield is negative, but the heavy investment phase suggests growth-oriented capital allocation.
Quarterly Revenue
$745096000.0B
2025-12
Revenue YoY Growth
+12.3%
YoY Comparison
Gross Margin
N/A
Latest Quarter
Free Cash Flow
$-20958000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is LTH Overvalued?
Given that Life Time is profitable with a trailing net income of $123.0 million, the primary valuation metric selected is the P/E ratio. The trailing P/E is 15.54x, while the forward P/E is 22.33x, indicating that the market expects earnings to grow significantly in the next year. The gap between trailing and forward P/E suggests an anticipated earnings decline or a normalization from a peak, but given the strong growth trajectory, it may reflect conservative estimates. Compared to the industry average P/E of 22x (as per valuation data), Life Time trades at a 29% discount on a trailing basis (15.54x vs. 22x), but at a slight premium on a forward basis (22.33x vs. 22x). This suggests the market is pricing in growth that is roughly in line with the sector. Historically, Life Time's P/E has ranged from 11.9x (Q4 2025) to 94.2x (Q3 2023), and the current trailing P/E of 15.54x is near the lower end of its historical band, indicating that the stock is relatively inexpensive compared to its own past, despite the recent rally. The PEG ratio of 0.13 (based on forward EPS growth) suggests the stock is undervalued relative to its growth rate, but this metric should be interpreted cautiously given the cyclicality of the fitness industry.
PE
15.5x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 12x~42x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant. Life Time carries a high debt-to-equity ratio of 2.16, which amplifies interest costs and financial vulnerability. The current ratio of 0.63 indicates potential liquidity stress, as current liabilities exceed current assets. While operating cash flow was strong at $239.9M in Q4 2025, free cash flow was negative at -$64.6M due to heavy capital expenditures of $304.5M for expansion. This reliance on external financing could strain the balance sheet if growth slows or interest rates rise. Additionally, revenue growth is decelerating, from 18.3% YoY in Q1 2025 to 12.3% in Q4 2025, which could pressure earnings if the trend continues.
FAQ
The key risks include high financial leverage (debt-to-equity of 2.16), which could strain cash flows if interest rates rise. Negative free cash flow of -$64.6M in Q4 2025 indicates heavy investment needs. The low current ratio of 0.63 raises liquidity concerns. Additionally, the stock's high beta of 1.498 means it is more volatile than the market, and a recession could hit consumer spending on premium fitness. Competitive pressures from lower-cost gyms also pose a threat. These risks are significant and should be weighed against the growth potential.
The 12-month forecast is bullish, with a base case target of $50-54, implying 10-20% upside. The bull case sees the stock reaching $64, driven by strong growth and margin expansion, with a 30% probability. The bear case, with a 20% probability, could see the stock fall to $39 if the economy weakens. The most likely scenario is the base case, which assumes continued revenue growth of around 12% and stable margins. Overall, analysts are optimistic, with a Strong Buy consensus and an average target of $54.43.
LTH appears undervalued relative to its growth prospects. The trailing P/E of 15.54x is below the industry average of 22x and near the lower end of its historical range (11.9x-94.2x). The PEG ratio of 0.13 suggests the stock is cheap for its expected growth. However, the forward P/E of 22.33x indicates the market expects earnings to grow, but if growth disappoints, the stock could be de-rated. Overall, the valuation implies the market is pricing in moderate growth, but the company's strong performance suggests it could be undervalued.
LTH appears to be a good buy for investors with a higher risk tolerance, given its strong growth and attractive valuation. The stock trades at a trailing P/E of 15.54x, below the industry average of 22x, and analysts see a 20.3% upside to the average target of $54.43. However, the high debt-to-equity ratio of 2.16 and negative free cash flow are concerns. If you believe in the company's expansion strategy and can tolerate volatility, it could be a rewarding investment. For conservative investors, the risks may outweigh the rewards.
LTH is better suited for long-term investment, given its growth trajectory and expansion plans. The company is investing heavily in new clubs, which should drive revenue and earnings growth over the next several years. The stock's high beta (1.498) makes it volatile in the short term, but long-term investors can benefit from the compounding growth. A minimum holding period of 3-5 years is recommended to ride out market fluctuations and allow the expansion strategy to pay off. Short-term traders may find opportunities, but the stock's volatility and leverage make it risky for short-term plays.
