Pickleball is a craze that’s catching on all over the United States, particularly with the older generation. With over 4.8 million pickleball players in the United States as of 2022, it is clear there is a market to be had here. And Life Time Holdings (LTH) is taking full advantage of it by releasing the “ultimate pickleball.” Investors were more than happy to believe it, sending shares up nearly 2% in Friday afternoon’s trading.
Life Time will be adding the new ball to its various clubs throughout the U.S. starting in August, which should represent a major advance forward in recreational technology. The new pickleball is said to be a masterful balance between bounce and durability, providing consistent results every time, which makes it a better long-term option for high-volume use, like on a professionally managed pickleball court.
Given that Life Time has already invested between $50 million and $100 million into its pickleball courts, making the best possible ball—and making it available exclusively to Life Time club members—should help boost its bottom line. This is especially true since pickleball is directly responsible for between 6% and 7% of its total membership dues.
And More Places to Find Them, Too
A better ball by itself is certainly helpful. It keeps current members in play and encourages non-members to step up and become new members by offering a better experience. But the new pickleball can only do so much without the courts to play on, and Life Time has that front covered too.
Life Time is also rolling out a new club in the Dallas-Fort Worth area, which is the 13th such club the company owns in the area and the 33rd in Texas in general. It will offer seven different pickleball courts, ensuring those new balls get a workout. A range of other services, from kids’ events to a full-service spa, will also be in play.
Is LTH a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on LTH stock based on five Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 44.93% rally in its share price over the past year, the average LTH price target of $24 per share implies 0.79% downside risk.
