Life Time Group Holdings, Inc.
LTH
$41.50
+0.05%
Life Time Group Holdings, Inc. operates premium, resort-style athletic country clubs across the United States and Canada, combining fitness, family recreation, spa services, and healthy-living programming under one membership model. With roughly 44,000 employees and a portfolio of large-format destinations in affluent metropolitan areas, the company positions itself as a differentiated lifestyle brand rather than a commodity gym operator, competing on experience and community rather than price. The investor narrative has shifted decisively toward a profitability and margin-expansion story, as the company has transitioned from a post-IPO loss-maker into a consistently profitable operator with expanding EBITDA and net income. Attention is now focused on membership growth, in-center revenue attachment, and whether the company can sustain its recent earnings momentum while managing a leveraged balance sheet and an ambitious capital-expenditure program.…
LTH
Life Time Group Holdings, Inc.
$41.50
Investment Opinion: Should I buy LTH Today?
The synthesized recommendation is Buy, based on the strong analyst consensus (mean 1.14, strong buy) and an average target price of $55.43, which implies 33.6% upside from the current $41.50. The core thesis is that Life Time is undergoing a successful profitability transformation, with net margin expanding to 16.51% in Q4 2025 from 5.60% a year earlier, and this margin leverage should continue to drive earnings growth. The stock's trailing PE of 15.54x is near historical lows, suggesting the market has not fully priced in the sustainability of these margins.
Supporting evidence includes: revenue growth of 12.33% year-over-year to $745.1 million in Q4 2025; a gross margin of 47.63% on a trailing basis; operating margin expansion to 16.07% trailing and 17.38% in Q4; and a PEG ratio of 0.127, which is exceptionally low. The company's ROE of 11.95% and ROA of 4.17% are respectable for a capital-intensive leisure business. Furthermore, the forward PE of 20.33x against estimated EPS of $3.18 implies that analysts expect substantial earnings growth, which aligns with the strong buy rating and high target prices.
The biggest risks that could invalidate this thesis are: (1) a slowdown in membership growth or retention that pressures revenue and margins; (2) the high debt load (D/E 2.16) and negative free cash flow (-$20.96 million) limiting financial flexibility; and (3) valuation compression if interest rates remain high or if the company fails to meet growth expectations. The rating would upgrade to a stronger Buy if free cash flow turns positive and debt is reduced, or downgrade to Hold if revenue growth decelerates below 8% or if net margin falls below 12%. Relative to its history and peers, the stock appears undervalued given its growth and margin trajectory, but the leverage warrants a discount. Overall, the valuation is attractive for a growth-oriented investor willing to accept above-average volatility.
Sign up to view all
LTH 12-Month Price Forecast
The forward-looking view is bullish, supported by the dramatic margin expansion and strong analyst sentiment, but confidence is tempered by the high leverage and negative free cash flow. The stock's low PEG ratio of 0.127 and historical PE discount suggest it is undervalued if growth persists. Key catalysts include upcoming earnings, free cash flow inflection, and debt reduction. I would upgrade to high confidence if free cash flow turns positive and net margin exceeds 17%, and downgrade to neutral if revenue growth falls below 8% or margins compress.
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 +33.6% versus the current price.
Average Target
$55.43
0 analysts
Implied Upside
+33.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$48 - $64
Analyst target range
Coverage is robust with 14 analysts, and sentiment is overwhelmingly bullish: the consensus recommendation is "strong_buy" with a recommendation mean of 1.14 (where 1.0 is a strong buy). The average target price of $55.43 implies approximately 33.6% upside from the current price of $41.50, a substantial gap that signals analysts believe the recent pullback is a buying opportunity rather than the start of a downtrend. The consensus leans decidedly bullish, with the average target sitting 33.6% above the current price and even the lowest target of $48.00 representing 15.7% upside, meaning no analyst sees downside from current levels.
The target range spans $48.00 to $64.00, a spread of $16.00 or roughly 33% of the low target, indicating moderate but not extreme dispersion in analyst views. The high target of $64.00 implies roughly 54% upside and would require either significant multiple expansion or evidence that the company can accelerate earnings growth beyond the current $3.18 consensus EPS estimate, potentially through faster club openings or margin expansion above 20%. The low target of $48.00 still assumes meaningful appreciation and likely prices in steady execution with modest multiple expansion. Institutional ratings show a constructive pattern: Morgan Stanley upgraded the stock from Equal Weight to Overweight in October 2025 and has maintained Overweight since, while Guggenheim has reiterated Buy multiple times and Mizuho and Craig-Hallum remain positive. The absence of any recent downgrades or Sell ratings reinforces the view that the analyst community sees the recent 5% pullback as a temporary consolidation within a longer-term uptrend.
Bulls vs Bears: LTH Investment Factors
The bull case currently has stronger evidence, anchored by a dramatic profitability inflection (net margin up to 16.51% from 5.60%), a strong buy consensus with 33.6% average upside, and a historically low PE of 15.54x. However, the bear case raises valid concerns about high leverage (D/E 2.16), negative free cash flow (-$20.96 million), and decelerating revenue growth. The single most important tension is whether the margin expansion is sustainable and can continue to drive earnings growth to justify the forward PE of 20.33x, or whether it will plateau as revenue growth slows. If margins hold and grow, the stock is undervalued; if they compress, the high debt load and negative FCF could trigger a sharp re-rating.
Bullish
- Explosive margin expansion: Net income surged to $123.0 million in Q4 2025 from $37.2 million a year earlier, lifting net margin to 16.51% from 5.60%. This 10.9 percentage point improvement demonstrates powerful operating leverage as membership dues scale against a largely fixed cost base.
- Strong analyst consensus and upside: 14 analysts rate the stock a strong buy (mean 1.14), with an average target of $55.43 implying 33.6% upside from $41.50. Even the lowest target of $48.00 represents 15.7% upside, meaning no analyst sees downside.
- Attractive PEG and historical discount: The PEG ratio of 0.127 is exceptionally low, and the trailing PE of 15.54x is near the low end of its historical range, down from 23.06x in Q2 2025 and 30.82x in Q4 2024. This suggests the stock is cheap relative to its growth and its own recent valuation history.
- Recurring revenue model with growth: Membership revenue of $535.1 million dominates the mix, providing subscription-like recurring cash flows. Total revenue grew 12.33% year-over-year to $745.1 million in Q4 2025, with a clear seasonal pattern that supports stable forecasting.
Bearish
- High leverage and weak liquidity: Debt-to-equity stands at 2.16 and the current ratio is just 0.63, indicating reliance on operating cash flow to service obligations. This leaves limited margin for error if membership growth stalls or interest rates remain elevated.
- Negative free cash flow: Trailing free cash flow is -$20.96 million, driven by heavy capital expenditure of $304.5 million in Q4 2025 alone. The capital-intensive model requires continued external financing or robust cash generation to fund growth.
- Decelerating revenue growth: Revenue growth of 12.33% year-over-year, while solid, is decelerating from prior levels. The investment case increasingly depends on margin leverage and same-center productivity rather than top-line acceleration.
- Elevated EV/EBITDA and forward PE: EV/EBITDA of 15.59x is elevated and reflects the substantial debt load, while the forward PE of 20.33x exceeds the trailing PE of 15.54x. This inversion suggests the market may be pricing in earnings decline or that trailing earnings are distorted.
LTH Technical Analysis
Life Time is in a sustained uptrend, with the stock up 41.25% over the past year and 55.49% year-to-date, decisively outperforming the S&P 500's 16.22% and 12.08% respective gains. At a current price of $41.50, the shares sit at roughly 75% of the 52-week range of $24.14 to $47.235, positioning them in the upper quartile of their annual band but still about 12% below the high. This positioning suggests a stock with strong momentum that has recently entered a consolidation phase rather than one that is overextended at its highs, leaving room for either a breakout or a deeper mean-reversion pullback. The 1-year relative strength of +25.03 percentage points versus SPY confirms genuine leadership rather than mere beta-driven performance.
Short-term momentum has decelerated sharply, with the stock down 5.29% over the past month versus a 1.06% decline for SPY, producing a negative 1-month relative strength of -4.23. This contrasts with the still-positive 3-month gain of 20.96% and 6-month gain of 57.79%, indicating that the powerful spring and summer rally has stalled into a pullback. The divergence between the strong 1-year trend and the negative 1-month reading is a classic consolidation signal: the primary uptrend remains intact, but near-term buyers have stepped back after a parabolic run from roughly $26 in March to over $45 in August. The stock's 3.02 short ratio is moderate and does not suggest an imminent squeeze, while the recent price action has been orderly rather than panicked, with the decline from the August high of $45.73 occurring on relatively contained volume.
Key technical support rests at the 52-week low of $24.14, though a more relevant near-term support zone lies around $40-$41, where the stock has stabilized in September after testing $41.48. Resistance is defined by the 52-week high of $47.235, and a decisive breakout above that level would confirm the resumption of the primary uptrend and likely target new all-time highs. Conversely, a breakdown below $40 would signal a deeper correction and put the $36-$37 June breakout zone in play. With a beta of 1.481, the stock is roughly 48% more volatile than the broader market, meaning position sizing should account for amplified drawdowns; the maximum drawdown of -16.33% over the observed period is consistent with this elevated risk profile.
Beta
1.48
1.48x market volatility
Max Drawdown
-16.3%
Largest decline past year
52-Week Range
$24-$47
Price range past year
Annual Return
+41.3%
Cumulative gain past year
| Period | LTH Return | S&P 500 |
|---|---|---|
| 1m | -5.3% | -1.6% |
| 3m | +21.0% | +1.3% |
| 6m | +57.8% | +13.9% |
| 1y | +41.3% | +16.3% |
| ytd | +55.5% | +12.1% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
LTH Fundamental Analysis
Revenue growth remains solid but is decelerating from elevated levels, with Q4 2025 revenue of $745.1 million representing 12.33% year-over-year growth. The quarterly progression through 2025 shows $706.0 million in Q1, $761.5 million in Q2, $782.6 million in Q3, and $745.1 million in Q4, a seasonal pattern where Q4 dips below Q3 due to holiday-season membership dynamics. Membership revenue dominates the mix at $535.1 million, dwarfing in-center revenue of $191.2 million and product/service revenue of $18.8 million, underscoring the recurring, subscription-like nature of the business model. The growth trajectory implies a maturing but still healthy expansion story, with the investment case increasingly dependent on margin leverage and same-center productivity rather than raw top-line acceleration.
Profitability has inflected dramatically, with Q4 2025 net income of $123.0 million on a 16.51% net margin, up from just $37.2 million and a 5.60% margin in the year-ago quarter. Gross margin stands at 47.63% on a trailing basis, while the Q4 gross profit ratio of 2.14 reflects a data anomaly in the reported figure, but the underlying gross margin trend across 2025 quarters has been stable in the 47-48% range. Operating margin has expanded to 16.07% trailing and 17.38% in Q4, with EBITDA of $266.3 million in Q4 alone, a 35.74% EBITDA margin. This margin expansion is the core of the bull case: the company is demonstrating operating leverage as membership dues scale against a largely fixed cost base of club operations, and the trajectory from a 4.18% net margin in Q1 2024 to 16.51% in Q4 2025 is a genuine transformation.
The balance sheet remains the primary risk, with a debt-to-equity ratio of 2.16 and a current ratio of just 0.63, indicating reliance on operating cash flow to service obligations. Free cash flow is negative on a trailing basis at -$20.96 million, driven by heavy capital expenditure of $304.5 million in Q4 2025 alone, as the company continues to invest in new clubs and renovations. Operating cash flow of $239.9 million in Q4 was robust, but the capital intensity of the model means external financing or continued cash generation is required to fund growth. ROE of 11.95% and ROA of 4.17% are respectable for a capital-intensive leisure business, but the negative FCF and high leverage mean the company has limited margin for error if membership growth stalls.
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
Open an Account, get $2 TSLA now!
Valuation Analysis: Is LTH Overvalued?
Because Life Time is solidly profitable with trailing net income of $123.0 million in the most recent quarter and positive EPS of $0.064 on a trailing basis, the PE ratio is the appropriate primary metric. The stock trades at a trailing PE of 15.54x and a forward PE of 20.33x, an unusual inversion where the forward multiple exceeds the trailing multiple. This implies the market expects earnings to decline or that the trailing figure is distorted by a one-time item, though the more likely explanation is that the trailing PE reflects a depressed TTM earnings base that is rapidly normalizing upward; the forward PE of 20.33x against estimated EPS of $3.18 suggests the market is pricing in substantial earnings growth from the current run-rate.
Relative to the broader Consumer Cyclical sector, Life Time's valuation appears mixed. Its PS ratio of 1.93x and PB ratio of 1.85x are modest for a consumer brand with 12% revenue growth and expanding margins, while the EV/EBITDA of 15.59x is elevated and reflects the company's substantial debt load. The PEG ratio of 0.127 is exceptionally low, suggesting the stock is cheap relative to its growth rate, though this metric can be misleading for companies with volatile earnings histories. The net margin of 12.48% and operating margin of 16.07% are healthy for the leisure industry, which supports a premium to lower-quality peers, but the 2.16 debt-to-equity ratio warrants a discount versus unlevered competitors.
Historically, Life Time's valuation has compressed dramatically from its early public-market days, when it traded at PS ratios above 8x and PE ratios exceeding 30x during its loss-making phase. The current PE of 15.54x is near the low end of its historical range, down from 23.06x in Q2 2025 and 30.82x in Q4 2024, reflecting both earnings growth and multiple compression. The PS ratio of 1.93x is also well below the 7-9x range seen throughout 2024 and 2025, though this comparison is complicated by the market cap discrepancy in the data. If the current earnings run-rate is sustainable, the stock's historical valuation band suggests it is trading at a discount to its own recent history, which could represent a value opportunity if growth persists or a warning if the market is anticipating a slowdown.
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
Life Time carries significant financial and operational risks. The debt-to-equity ratio of 2.16 and current ratio of 0.63 indicate a leveraged balance sheet with limited short-term liquidity, making the company vulnerable to rising interest rates or a downturn in membership. Free cash flow is negative at -$20.96 million on a trailing basis, driven by capital expenditures of $304.5 million in Q4 2025 alone, meaning the company must continue to generate robust operating cash flow or secure external financing to fund its growth plans. Additionally, revenue is heavily concentrated in membership dues ($535.1 million of $745.1 million in Q4), so any decline in retention or new member additions would directly hit the top line and pressure margins.
Market and competitive risks are also material. The stock trades at a premium EV/EBITDA of 15.59x and a forward PE of 20.33x, leaving it exposed to valuation compression if growth disappoints or if interest rates remain high, which would disproportionately affect leveraged consumer discretionary names. With a beta of 1.481, the shares are roughly 48% more volatile than the broader market, amplifying drawdowns during sector rotations or macro shocks. The leisure and fitness industry is highly competitive, and Life Time's premium positioning could be challenged by lower-cost operators or economic weakness that pushes consumers to trade down. Recent news is absent, but the lack of any positive catalysts in the near term could keep the stock range-bound.
In a worst-case scenario, a combination of slowing membership growth, margin compression, and refinancing difficulties could trigger a severe sell-off. The 52-week low is $24.14, which represents a 41.8% decline from the current price of $41.50. If the company misses earnings expectations and analysts downgrade the stock, the shares could retest that low, especially given the high beta and negative free cash flow. The maximum drawdown observed over the past period was -16.33%, but in a more adverse environment, losses could exceed 40% from current levels. Investors should be prepared for significant downside if the growth narrative falters.
FAQ
The key risks include: 1) Financial risk: high debt-to-equity of 2.16 and a current ratio of 0.63, with negative free cash flow of -$20.96 million, which could strain liquidity if cash generation slows. 2) Operational risk: revenue is heavily concentrated in membership dues ($535.1 million of $745.1 million in Q4), so a decline in retention would directly impact results. 3) Market risk: the stock has a beta of 1.481, making it 48% more volatile than the market, and it is exposed to valuation compression if interest rates rise. 4) Competitive risk: the fitness industry is highly competitive, and economic weakness could push consumers to lower-cost alternatives. These risks are ranked from highest to lowest severity, with financial and operational risks being the most immediate.
The 12-month forecast includes three scenarios: Bull case (30% probability) targets $55-$64, assuming continued margin expansion and multiple expansion; Base case (50% probability) targets $48-$55, assuming steady execution with revenue growth of 10-12% and net margin holding at 15-16%; Bear case (20% probability) targets $24.14-$36, assuming a slowdown in membership growth and margin compression. The most likely scenario is the base case, with the key assumption that the company maintains its recent margin gains and grows revenue at a low double-digit rate. The analyst average target of $55.43 aligns with the base case, implying 33.6% upside.
LTH appears undervalued relative to its growth and historical valuation. The trailing PE of 15.54x is near the low end of its historical range, down from 23.06x in Q2 2025 and 30.82x in Q4 2024, while the PEG ratio of 0.127 is exceptionally low. The PS ratio of 1.93x is also well below the 7-9x range seen in 2024. However, the EV/EBITDA of 15.59x is elevated due to the debt load, and the forward PE of 20.33x exceeds the trailing PE, suggesting the market expects earnings growth. Compared to peers, the valuation is mixed but generally attractive given the margin expansion. The market is pricing in continued earnings growth, and if that materializes, the stock is undervalued.
From a risk/reward perspective, LTH offers a compelling opportunity with 33.6% upside to the average analyst target of $55.43, supported by a strong buy consensus and a low PEG ratio of 0.127. The company's net margin expanded to 16.51% in Q4 2025, demonstrating significant operating leverage. However, the high debt-to-equity of 2.16 and negative free cash flow of -$20.96 million present substantial risks. The biggest downside risk is a retest of the 52-week low of $24.14, which would represent a 41.8% loss. Therefore, it is a good buy for growth-oriented investors with a higher risk tolerance and a medium-to-long-term horizon, but not suitable for conservative investors.
LTH is more suitable for a medium-to-long-term investment horizon of at least 2-3 years, given its growth stage, high volatility (beta 1.481), and no dividend (payout ratio 0). The company is in a capital-intensive expansion phase, with negative free cash flow, and its earnings visibility is improving but still subject to execution risks. Short-term trading would be risky due to the stock's high beta and recent 5.29% monthly decline. Long-term investors can benefit from the margin expansion story and potential multiple re-rating as the company deleverages and generates positive free cash flow. A minimum holding period of 2 years is suggested to ride out volatility and realize the growth potential.