Life Time Group Holdings, Inc.
LTH
$47.75
+0.76%
Life Time Group Holdings, Inc. operates premium, resort-style athletic country clubs across the United States and Canada, combining fitness, spa, family recreation, and wellness programming into large-format destinations that generate revenue primarily through membership dues supplemented by in-center services and ancillary product sales. The company occupies a differentiated position in the Consumer Cyclical/Leisure space as an experience-led, high-amenity operator rather than a low-price gym chain, giving it pricing power and a membership base skewed toward higher-income households. The current investor narrative centers on a multi-year margin expansion story: management has been driving operating leverage through membership growth, dues increases, and disciplined cost control, with operating margins climbing into the high-teens and net income inflecting sharply upward. Recent quarterly results (Q3 2026 revenue of $893.5M, up 14.2% year-over-year, with net income of $106.5M) have reinforced the thesis that Life Time is converting top-line growth into disproportionate earnings growth, while heavy capital expenditure on new club openings and remodels keeps the free cash flow debate alive.…
LTH
Life Time Group Holdings, Inc.
$47.75
Investment Opinion: Should I buy LTH Today?
Rating: Buy. Life Time is a margin-expansion compounder trading at a de-rated 15.54x trailing earnings while growing revenue 14.2% year-over-year and converting that growth into EPS that more than doubled to $0.46 in Q3 2026 from $0.17 a year earlier; the unanimous 15-analyst Buy consensus with a $57.60 average target (+29.2% upside) and a $52.00 floor target (+16.7%) anchors the view that the fundamental trajectory, not the multiple, is the story. The core thesis is that operating leverage from membership growth and dues increases keeps pushing the 17.68% operating margin higher while the market continues to value the stock near the bottom of its post-IPO PE band.
Supporting evidence is concrete: trailing PE of 15.54x versus 30.7x in Q4 2024, a PEG of 0.127, and 1.85x price-to-book against an 11.95% ROE all suggest the market is not extrapolating aggressive growth. Revenue has grown double digits for four consecutive quarters ($745.1M, $788.7M, $866.0M, $893.5M), membership dues of $622.1M provide roughly 70% recurring revenue, and operating margin has climbed from 13.1% in Q4 2024 to 17.68% in Q3 2026. The offset is cash flow: trailing FCF of -$206.2M, 2.16x debt-to-equity, and a 0.63 current ratio mean the model is externally funded, and the 21.70x forward PE versus 15.54x trailing shows the trailing multiple flatters normalized earnings.
The biggest risks that could invalidate the thesis are a capex overrun that keeps FCF negative, a membership growth stall that compresses the 17.68% operating margin, and a consumer slowdown hitting the premium, discretionary-spending base. This Buy would downgrade to Hold if trailing FCF stays negative through 2027 or if revenue growth decelerates below 10%, and would upgrade in conviction if FCF inflects positive while operating margin holds above 17%. On balance the stock is fairly valued to modestly undervalued relative to its own history (15.54x versus a 30.7x peak) and reasonably priced versus peers on PS of 1.93x, leaving room for re-rating if margins and cash flow inflect.
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LTH 12-Month Price Forecast
The forward view is constructive but not unconditional: the margin-expansion story is well evidenced by four consecutive quarters of double-digit revenue growth and a 458-basis-point operating margin gain since Q4 2024, and the 15.54x trailing PE leaves room for multiple expansion if earnings normalize as consensus expects. The 21.70x forward PE versus 15.54x trailing is the key caution, showing the trailing multiple flatters normalized earnings and that the market already prices a solid forward trajectory. Analyst sentiment is uniformly positive with every target above the current price, but the late-October reiterations suggest the bullish case is well understood rather than a fresh catalyst. I would upgrade to high confidence if trailing FCF inflects positive while operating margin holds above 17%, and downgrade to neutral if revenue growth decelerates below 10% or leverage rises above 2.16x.
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 $57.60 and implied upside of +20.6% versus the current price.
Average Target
$57.60
15 analysts
Implied Upside
+20.6%
vs. current price
Analyst Count
15
covering this stock
Price Range
$52 - $70
Analyst target range
Coverage is deep and uniformly bullish: 15 analysts rate the stock, with 15 Buy, 0 Hold, and 0 Sell, producing a consensus recommendation of "strong_buy" and a recommendation mean of 1.2. The average target price of $57.60 implies roughly +29.2% upside from the current $44.57, and even the lowest target of $52.00 sits about 16.7% above the market price — meaning every published target is above the current quote, an unusually strong signal of conviction. Consensus estimates of $2.24 EPS and $4.63B revenue for the forward period underpin that optimism.
The target range of $52.00 to $70.00 is moderately wide (a 34.6% spread from low to high), with the $70.00 high case implying roughly 57% upside and pricing in successful new-club maturation, continued margin expansion toward the low-20s, and multiple re-rating toward the mid-20s on forward earnings. The $52.00 low case still assumes solid execution but likely caps multiple expansion and assumes capex-driven free cash flow remains negative for longer. Institutional ratings show a steady stream of reiterations — Guggenheim, KeyBanc, Wells Fargo, and Barclays all reaffirmed Buy/Overweight on October 30, 2026, with Morgan Stanley and Mizuho doing so on October 27 — indicating analysts are maintaining rather than chasing the position, which suggests the bullish case is well understood and the risk is execution against already-elevated expectations rather than a lack of coverage.
Bulls vs Bears: LTH Investment Factors
The bull case currently holds the stronger evidence: 14.2% revenue growth, operating margins expanding 458 basis points from Q4 2024's 13.1% to 17.68%, EPS more than doubling year-over-year, and a trailing PE of 15.54x near the low end of its historical band. Unanimous Buy coverage with a $52.00 floor target and +29.2% average upside reinforces that the fundamental trajectory is intact and the multiple is not stretched on trailing earnings. The bear case rests on cash flow and balance sheet: -$206.2M trailing FCF, 2.16x debt-to-equity, and a 0.63 current ratio mean the growth is externally funded, while the 21.70x forward PE reveals the trailing multiple flatters normalized earnings. The single most important tension is whether the capex-heavy new-club pipeline converts into positive free cash flow before leverage constrains the model — if FCF inflects, the de-rated multiple expands and the $57.60 target is conservative; if capex keeps outrunning operating cash flow, the 15.54x trailing PE is a value trap rather than a discount.
Bullish
- Unanimous analyst conviction, every target above price: All 15 covering analysts rate LTH a Buy (0 Hold, 0 Sell) with a recommendation mean of 1.2, and even the lowest target of $52.00 sits 16.7% above the $44.57 quote. The $57.60 average target implies +29.2% upside, an unusually strong signal that the Street sees no near-term downside case.
- Operating leverage driving disproportionate earnings growth: Operating margin climbed from 17.10% in Q1 2026 to 17.29% in Q2 and 17.68% in Q3, versus just 13.1% in Q4 2024. Diluted EPS more than doubled to $0.46 in Q3 2026 from $0.17 a year earlier on 14.2% revenue growth, confirming fixed costs are being absorbed by membership additions and dues increases.
- Recurring, subscription-like revenue base: Membership dues of $622.1M account for roughly 70% of Q3 2026's $893.5M revenue, with in-center spending at $249.0M and product/other at $22.4M. This recurring structure makes the top line far more durable than a transactional traffic-driven leisure model, and revenue has grown double digits for four consecutive quarters.
- Valuation near historical low despite improving fundamentals: The trailing PE has compressed from 30.7x in Q4 2024 to 15.54x today, near the bottom of its post-IPO band, while the PEG ratio of 0.127 implies the market pays very little for expected growth. A 1.85x price-to-book and 6.66x price-to-cash-flow are modest for a business earning an 11.95% ROE.
Bearish
- Negative free cash flow as capex outruns operations: Trailing free cash flow is -$206.2M, with Q3 2026 capex of $288.8M exceeding operating cash flow of $262.1M. The growth model is not yet self-financing, and the investment case depends on new clubs maturing into cash returns before leverage becomes a constraint.
- Elevated leverage and thin liquidity: Debt-to-equity stands at 2.16x and the current ratio is just 0.63, reflecting the capital-intensive, lease-heavy club model. Q3 interest expense of $14.7M is a recurring drag, and a 0.63 current ratio leaves limited cushion if operating cash flow softens.
- Forward PE exceeds trailing, implying earnings normalization: The stock trades at 15.54x trailing but 21.70x forward earnings, an unusual inversion that suggests the trailing figure benefits from a low base. Consensus 2027 EPS of $2.24 against $44.57 implies roughly 19.9x forward, meaning the market is not actually paying a depressed multiple on normalized earnings.
- High beta and limited margin of safety near highs: Beta of 1.49 makes LTH roughly 50% more volatile than the market, and the -16.49% max drawdown shows how quickly positions can erode. At $44.57 the stock is only 5.8% below its $47.32 52-week high, leaving little cushion for new entries if momentum stalls.
LTH Technical Analysis
Life Time is in a sustained, powerful uptrend: the stock is up 79.21% over the past year and 66.99% year-to-date, dramatically outpacing the S&P 500's 10.39% and 10.62% respective gains. At $44.57, the shares sit at roughly 90.2% of the 52-week range (low $24.14, high $47.32), positioning them near the upper end of their annual band — a sign of persistent momentum but also of limited near-term margin of safety for new entries. The relative strength readings confirm the leadership: +68.82% versus SPY over one year and +56.37% YTD.
Short-term momentum is re-accelerating after a mid-year consolidation. The stock is up 8.73% over the past month versus a -1.99% decline for SPY (relative strength +10.72%), and up 38.46% over six months, yet it is essentially flat over three months (-1.63%), revealing a summer-to-fall digestion phase between roughly $40 and $45.70 that has now resolved upward with the late-October push to $45.35. That pattern — strong 1-month and 6-month gains bracketing a flat 3-month stretch — is characteristic of a high-level base rather than a reversal, and the recent breakout attempt above $45 suggests buyers are regaining control. Volume of approximately 3.77 million shares and a short ratio of 4.08 days indicate moderate speculative interest without extreme crowding.
Key technical levels are well defined: support rests at the 52-week low of $24.14, with a more relevant near-term floor around the $40 psychological and consolidation zone, while resistance sits at the 52-week high of $47.32. A decisive break above $47.32 would confirm the uptrend's continuation and likely invite momentum-driven flows; a failure and breakdown below $40 would signal a deeper mean-reversion test toward the mid-$30s. With a beta of 1.49, the stock is roughly 50% more volatile than the market, and the -16.49% max drawdown underscores that position sizing and stop discipline matter materially for holders of this name.
Beta
1.49
1.49x market volatility
Max Drawdown
-16.5%
Largest decline past year
52-Week Range
$24-$49
Price range past year
Annual Return
+88.1%
Cumulative gain past year
| Period | LTH Return | S&P 500 |
|---|---|---|
| 1m | +18.3% | -5.9% |
| 3m | +9.0% | -5.2% |
| 6m | +49.5% | -0.6% |
| 1y | +88.1% | +8.2% |
| ytd | +78.9% | +7.5% |
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LTH Fundamental Analysis
Revenue growth is robust and remarkably consistent: Q3 2026 revenue of $893.5M rose 14.17% year-over-year from $782.6M, extending a cadence of double-digit gains across the trailing four quarters (Q4 2025 $745.1M, Q1 2026 $788.7M, Q2 2026 $866.0M, Q3 2026 $893.5M). Membership dues are the dominant engine at $622.1M, with in-center spending contributing $249.0M and product/other $22.4M, meaning the model is anchored in recurring subscription-like revenue rather than transactional traffic. The sequential climb from $788.7M to $893.5M (+13.3% in two quarters) points to both membership additions and pricing power, supporting the view that growth is durable rather than a one-off rebound.
Profitability has inflected decisively. Q3 2026 net income reached $106.5M (11.9% net margin) on gross profit of $797.4M, with the reported 89.2% gross margin reflecting a presentation where most club operating costs sit in operating expenses rather than cost of revenue; the more meaningful operating margin was 17.68%, up from 17.29% in Q2 and 17.10% in Q1 2026, and well above the 13.1% operating margin in Q4 2024. Net income has compounded from $37.2M in Q4 2024 to $123.0M in Q4 2025 and $106.5M in the seasonally strong Q3 2026, while diluted EPS climbed to $0.46 from $0.17 a year earlier — evidence of genuine operating leverage as revenue outgrows fixed costs.
Balance sheet and cash flow present the main blemish. Debt-to-equity stands at 2.16x with a current ratio of just 0.63, reflecting the capital-intensive, lease-heavy nature of the club model, and trailing free cash flow is negative at -$206.2M as capex of $288.8M in Q3 alone outran operating cash flow of $262.1M. ROE of 11.95% and ROA of 4.25% are respectable but not exceptional, and the negative FCF yield means growth is being funded partly through external capital and internally generated cash rather than self-financing. The investment case therefore hinges on whether the new-club pipeline matures into cash returns before leverage becomes a constraint.
Quarterly Revenue
$893524000.0B
2026-09
Revenue YoY Growth
+14.2%
YoY Comparison
Gross Margin
89.2%
Latest Quarter
Free Cash Flow
$-206206000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is LTH Overvalued?
Because Life Time is solidly profitable (Q3 2026 net income of $106.5M), the PE ratio is the appropriate primary metric. The stock trades at 15.54x trailing earnings but 21.70x forward earnings — an unusual inversion where the forward multiple exceeds the trailing one, implying the market expects either earnings normalization or that the trailing figure benefits from a low base; notably, consensus 2027 EPS of $2.24 against a $44.57 price implies roughly 19.9x forward earnings, broadly consistent with the 21.7x figure. The PEG ratio of 0.127 is extraordinarily low, suggesting the market is paying very little for expected growth if the consensus trajectory holds.
Relative to its own sector, the picture is mixed: a PS ratio of 1.93x and EV/Sales of 4.26x are moderate for a consumer leisure operator with double-digit growth, while EV/EBITDA of 15.59x is fuller and reflects the capital-intensive asset base. The 1.85x price-to-book is modest for a business earning an 11.95% ROE, and the 6.66x price-to-cash-flow looks inexpensive against the operating cash flow generation of roughly $262M per quarter. On balance, the multiples suggest the market is not extrapolating aggressive growth, leaving room for re-rating if margins and free cash flow inflect.
Historically, Life Time's valuation has compressed dramatically as earnings have grown: the PE ratio was 30.7x in Q4 2024, 20.8x in Q3 2026 on the historical-ratio series, and now 15.54x trailing — near the low end of its post-IPO band. The PS ratio tells a different story, having risen from 6.91x in Q4 2024 to roughly 10.0x on the historical series (versus the 1.93x figure in the current valuation snapshot, which likely reflects a different share-count basis), so the earnings-based de-rating is the cleaner signal. Trading near the bottom of its historical PE range while fundamentals improve is the classic setup for multiple expansion — provided the capex-heavy free cash flow profile does not undermine confidence.
PE
15.5x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 12x~42x
vs. Industry Avg
21.9x
Industry PE ~21.9x*
EV/EBITDA
15.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on the cash flow profile. Trailing free cash flow is -$206.2M because Q3 2026 capex of $288.8M exceeded operating cash flow of $262.1M, meaning each new club opening consumes capital before it matures into dues revenue. Debt-to-equity of 2.16x and a current ratio of just 0.63 leave thin liquidity cushion, and Q3 interest expense of $14.7M is a fixed claim on earnings that rises if refinancing costs increase. Revenue is also concentrated: membership dues of $622.1M represent roughly 70% of the $893.5M quarterly top line, so any softening in membership growth or resistance to dues increases would hit the model directly. Earnings quality is improving but the 11.9% net margin still depends on continued operating leverage, and a stall in revenue growth would quickly compress the 17.68% operating margin.
Market and competitive risks are dominated by valuation and volatility. Beta of 1.49 means LTH moves roughly 50% more than the market, so a broad consumer-cyclical rotation or a risk-off tape would hit the shares disproportionately. The forward PE of 21.70x exceeding the 15.54x trailing multiple means the market is already pricing earnings normalization, so any guidance cut would compress an already-full forward multiple rather than a depressed one. The premium, experience-led club format is exposed to discretionary spending by higher-income households; a weakening labor market or a pullback in premium consumer spending would pressure both membership additions and in-center spending of $249.0M per quarter. Competition from boutique fitness and low-cost gym chains, plus the capital intensity of maintaining resort-style amenities, keeps pricing power contingent on continuous reinvestment.
In a worst-case scenario, a consumer slowdown coincides with a capex overrun and a membership growth stall: free cash flow stays negative, leverage rises above 2.16x, and the market re-rates the stock toward its 52-week low of $24.14. From the current $44.57, that represents a decline of roughly 45.8%, and even a move to the $40 consolidation floor would be about -10.2%. The -16.49% max drawdown is a realistic near-term stress case, but the 52-week low shows the full downside if the margin expansion story reverses. An investor could lose 45% or more in that adverse chain, which is why position sizing matters given the 1.49 beta.
FAQ
The most severe risk is financial: trailing free cash flow of -$206.2M because Q3 2026 capex of $288.8M exceeded operating cash flow of $262.1M, combined with 2.16x debt-to-equity and a 0.63 current ratio that leave little liquidity cushion if capital markets tighten. Second is operational concentration — membership dues of $622.1M are roughly 70% of the $893.5M quarterly revenue, so a membership growth stall or dues resistance would directly compress the 17.68% operating margin that the entire thesis depends on. Third is market and macro risk: beta of 1.49 means the shares move about 50% more than the market, and the premium, experience-led format is exposed to discretionary spending by higher-income households, so a consumer slowdown would hit both membership additions and the $249.0M in-center revenue line. Fourth is valuation/expectation risk — with 15 Buy ratings, 0 Hold and 0 Sell, and every target above the current price, the bullish case is fully understood, so any guidance miss would likely trigger outsized multiple compression from the 21.70x forward level.
The 12-month forecast is split into three scenarios: a 55% probability base case targeting $52.00 to $57.60 (+17% to +29%) on low-to-mid-teens revenue growth, high-teens operating margin, and forward EPS near the $2.24 consensus; a 25% probability bull case targeting $57.60 to $70.00 (+29% to +57%) on margin pushing toward the low-20s and free cash flow inflecting positive as capex moderates; and a 20% probability bear case targeting $24.14 to $40.00 (-10% to -46%) on a consumer slowdown, capex overrun, and membership stall. The base case is most likely and rests on the assumption that operating margin holds near 17.68% and revenue grows 12-14%, consistent with four consecutive quarters of double-digit growth. The distribution is skewed favorably — the base and bull cases together carry 80% probability and both sit above the current $44.57 price, while the bear case requires a specific chain of negative developments rather than simple mean reversion.
On trailing earnings, LTH looks modestly undervalued: 15.54x PE sits near the bottom of its post-IPO band versus 30.7x in Q4 2024, and the 0.127 PEG implies the market pays very little per unit of expected growth. The complication is the forward multiple — 21.70x forward versus 15.54x trailing is an unusual inversion, and consensus 2027 EPS of $2.24 against $44.57 implies roughly 19.9x forward, meaning the trailing figure flatters normalized earnings. Supporting metrics are mixed but reasonable: 1.93x PS and 4.26x EV/Sales are moderate for a double-digit grower, 1.85x price-to-book is modest against an 11.95% ROE, while 15.59x EV/EBITDA is fuller and reflects the capital-intensive asset base. The market appears to be pricing solid but not heroic execution — roughly 20x forward earnings for a business growing revenue 14% with expanding margins — leaving room for re-rating if free cash flow inflects, but not a deep-value discount.
From a risk/reward perspective, LTH offers roughly +29.2% upside to the $57.60 average analyst target and +16.7% even to the lowest $52.00 target, against downside of about -10.2% to the $40 consolidation floor and -45.8% to the $24.14 52-week low in a severe scenario. The reward side is supported by concrete fundamentals — 14.2% revenue growth, operating margin up 458 basis points since Q4 2024, and EPS more than doubling to $0.46 — while the risk side is dominated by -$206.2M trailing free cash flow and 2.16x debt-to-equity. The 15.54x trailing PE and 0.127 PEG suggest the market is not paying much for that growth, which improves the odds that the multiple expands if execution holds. It is a good buy for growth-oriented investors with a multi-year horizon and tolerance for 1.49 beta volatility, particularly on pullbacks toward the $40 support zone; it is a weaker fit for capital-preservation mandates given the negative FCF and thin 0.63 current ratio.
LTH is better suited to a long-term holding period of at least 18-24 months than to short-term trading. The thesis depends on new clubs maturing into operating leverage and free cash flow inflecting from -$206.2M, which is a multi-quarter process, and the 1.49 beta plus -16.49% max drawdown make short-term price action highly sensitive to consumer-cyclical sentiment. The stock has already run 79.21% over one year versus SPY's 10.39%, and at $44.57 it sits at 90.2% of its 52-week range, so near-term entry timing carries real risk of a pullback toward the $40 support zone. There is no dividend (0% yield, 0% payout ratio), so total return depends entirely on earnings growth and multiple expansion rather than income. A reasonable approach is a staged entry over several months with a minimum 18-month horizon, reassessing if trailing FCF remains negative through 2027 or if revenue growth falls below 10%.