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The Gym Group PLC (GB:GYM)
LSE:GYM

The Gym (GYM) AI Stock Analysis

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GB:GYM

The Gym

(LSE:GYM)

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Neutral 69 (OpenAI - 5.2)
Rating:69Neutral
Price Target:
182.00p
▲(7.69% Upside)
The Gym Group's stock score is driven by strong financial recovery and positive earnings call sentiment. However, high leverage and a relatively high P/E ratio pose risks. Technical indicators suggest moderate bullish momentum, while strategic initiatives like the employee share scheme support future growth.
Positive Factors
Membership & Revenue Growth
Sustained membership growth and rising average revenue per member strengthen recurring revenue predictability and unit economics. Over the medium term this increases scale benefits, supports margin expansion through fixed-cost absorption, and underpins durable cash generation.
Strong cash generation and deleveraging
Material free cash flow and a meaningful fall in net debt materially improve financial flexibility. Lower leverage reduces refinancing and interest risk, enabling reinvestment in sites and capital returns while supporting resilience across economic cycles.
Attractive expansion unit economics
A disciplined rollout with high projected ROIC indicates scalable, profitable growth. Sustained delivery of high-return sites can drive durable earnings accretion, expand market share, and improve capital efficiency over multiple years.
Negative Factors
Elevated leverage on balance sheet
Persistently high leverage increases vulnerability to interest-rate or revenue shocks and restricts capital allocation flexibility. Even with recent reductions, elevated debt can limit ability to fund expansion or absorb cost inflation without pressuring cash flow or credit metrics.
Rising central costs
Growing central overhead undermines operating leverage; if structural rather than temporary, it will compress margins over time despite revenue growth. Higher fixed central costs reduce incremental profitability from new members and slow free cash flow improvement.
Site-level inflationary pressure
Sustained increases in utilities and wages raise site operating costs, eroding site-level margins and ROIC. Persistent site inflation may force price rises or reduce promotional reach, challenging long-term margin sustainability and the economics of additional openings.

The Gym (GYM) vs. iShares MSCI United Kingdom ETF (EWC)

The Gym Business Overview & Revenue Model

Company DescriptionThe Gym Group plc operates a chain of health and fitness facilities in the United Kingdom. As of December 31, 2021, it operated 202 gym sites under The Gym Group brand. The company was founded in 2007 and is based in Croydon, the United Kingdom.
How the Company Makes MoneyThe Gym primarily generates revenue through membership subscriptions, which offer access to its facilities and services. Various membership tiers cater to different demographics, including basic access, premium options with additional benefits, and family plans. In addition to membership fees, the company earns income from personal training sessions, fitness classes, and specialized workshops. Merchandise sales, such as branded apparel and fitness equipment, also contribute to revenue. Furthermore, The Gym may establish partnerships with local businesses and health-focused brands, creating additional revenue streams through sponsored events and promotions. This diversified revenue model enables the company to maintain steady cash flow and adapt to market changes.

The Gym Earnings Call Summary

Earnings Call Date:Sep 10, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Mar 11, 2026
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in revenue, EBITDA, and membership, with effective cost management and debt reduction. However, there are some concerns regarding central cost growth and anticipated inflationary pressures on site costs. The sentiment remains largely positive due to the significant achievements and strategic advancements.
Q2-2025 Updates
Positive Updates
Strong Revenue and Membership Growth
Closing membership up 5%, revenue for the period up 8%, and average revenue per member month increased by 4%.
EBITDA and Profit Growth
EBITDA less normalized rent was up 24% year-on-year, with statutory profit before tax increasing by GBP 3.1 million.
Debt Reduction
Net debt reduced by GBP 10.1 million to GBP 51.2 million, lowering the net debt-to-EBITDA leverage ratio to 1x.
Successful New Site Openings
On track to increase openings to 14 to 16 in 2025, with new sites expected to deliver a 30% ROIC.
Positive Market Trends and Consumer Engagement
Gym penetration reached new highs, with Gen Z prioritizing fitness and showing strong engagement in gym activities.
Negative Updates
Central Costs Growth
Central costs grew by 7%, with expectations for growth rate to slow in the second half.
Inflationary Pressures on Site Costs
Site cost inflation expected to return in the second half, influenced by electricity cost increases and wage pressures.
Pilot Programs and Uncertainty
Pilot programs in B2B2C channels are at an early stage, with outcomes yet to be determined.
Company Guidance
The guidance provided during the Gym Group's half-year results call for 2025 highlighted several key financial and operational metrics. The company reported a 5% increase in closing membership and an 8% rise in revenue, with a 3% growth on a like-for-like basis. EBITDA, less normalized rent, saw a significant increase of 24%, reflecting strong cost management. Average members in the first half reached 953,000, up 4% year-on-year, with an average revenue per member month of GBP 21.16. The company achieved a free cash flow of GBP 25.1 million, allowing a net debt reduction to GBP 51.2 million and a net debt-to-EBITDA leverage ratio of 1x. The Gym Group plans to open 14 to 16 new sites in 2025, aligning with its strategy to launch approximately 50 new sites over three years. The company also emphasized the ongoing structural growth of the gym market, with gym penetration rates hitting new highs, and expressed confidence in further progress on mature site ROIC, which will be detailed in the full-year results.

The Gym Financial Statement Overview

Summary
The Gym has shown impressive financial recovery with a strong increase in revenue and profitability. Operational efficiency is evident, but high leverage and potential risks associated with debt levels require careful management.
Income Statement
75
Positive
The Gym has demonstrated a strong recovery with a significant increase in revenue from 2023 to 2024, growing by 10.98%. Gross profit margin remains robust, and the company has improved its net income position from a loss to a profit. EBIT and EBITDA margins are healthy, indicating operational efficiency. However, historical volatility in net income highlights some underlying risks.
Balance Sheet
65
Positive
The balance sheet shows a high debt-to-equity ratio, indicating significant leverage, which poses potential risks. The equity ratio is moderate, reflecting an average reliance on equity financing. Return on equity has improved as the company returned to profitability, but the high level of total debt warrants caution.
Cash Flow
70
Positive
The Gym's cash flow is strong with substantial operating cash flow growth and positive free cash flow. The free cash flow to net income ratio is favorable, highlighting effective cash conversion. However, fluctuations in capital expenditures and high debt levels may impact future cash flow stability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue235.20M226.30M204.00M172.90M106.00M80.47M
Gross Profit201.90M223.40M201.20M111.40M51.60M29.42M
EBITDA72.70M83.40M70.80M56.20M25.10M-9.10M
Net Income7.50M4.40M-8.40M-19.30M-35.40M-36.37M
Balance Sheet
Total Assets589.20M585.60M571.50M595.60M564.70M532.49M
Cash, Cash Equivalents and Short-Term Investments9.30M3.00M1.50M5.40M7.30M3.74M
Total Debt398.60M401.80M398.10M420.40M380.60M355.50M
Total Liabilities454.40M454.00M443.50M461.60M412.60M378.04M
Stockholders Equity134.80M131.60M128.00M134.00M152.10M154.44M
Cash Flow
Free Cash Flow58.80M55.10M55.80M19.40M11.40M-15.79M
Operating Cash Flow96.50M95.10M79.50M63.10M37.10M13.46M
Investing Cash Flow-42.90M-39.50M-23.40M-48.70M-25.70M-30.21M
Financing Cash Flow-49.00M-54.10M-60.00M-16.30M-7.80M16.10M

The Gym Technical Analysis

Technical Analysis Sentiment
Positive
Last Price169.00
Price Trends
50DMA
146.98
Positive
100DMA
144.98
Positive
200DMA
145.27
Positive
Market Momentum
MACD
5.31
Negative
RSI
76.67
Negative
STOCH
87.29
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:GYM, the sentiment is Positive. The current price of 169 is above the 20-day moving average (MA) of 154.91, above the 50-day MA of 146.98, and above the 200-day MA of 145.27, indicating a bullish trend. The MACD of 5.31 indicates Negative momentum. The RSI at 76.67 is Negative, neither overbought nor oversold. The STOCH value of 87.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:GYM.

The Gym Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
£463.01M13.6822.81%4.36%8.79%17.06%
73
Outperform
£134.28M11.2119.29%3.00%16.79%26.31%
69
Neutral
£782.36M12.5817.81%1.50%4.52%50.39%
69
Neutral
£294.08M39.675.72%8.74%
66
Neutral
£1.64B9.176.58%3.87%18.31%
66
Neutral
£4.69B19.467.52%3.80%-2.12%8.95%
61
Neutral
$18.38B12.79-2.54%3.03%1.52%-15.83%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:GYM
The Gym
169.00
29.80
21.41%
GB:BOWL
Hollywood Bowl
278.00
4.07
1.49%
GB:MAB
Mitchells & Butlers
272.00
30.00
12.40%
GB:RFX
Ramsdens Holdings
415.00
187.54
82.45%
GB:JDW
J D Wetherspoon
758.00
158.60
26.46%
GB:WTB
Whitbread
2,783.00
-25.69
-0.91%

The Gym Corporate Events

Stock BuybackRegulatory Filings and Compliance
The Gym Group Cuts Share Capital with Latest Buyback
Neutral
Jan 19, 2026

The Gym Group plc has repurchased 19,805 of its ordinary shares on 16 January 2026 through Peel Hunt LLP at a volume-weighted average price of 165.17 pence, with prices ranging between 164.00 and 166.00 pence. The company intends to cancel these shares, reducing its issued share capital to 179,604,341 ordinary shares with no shares held in treasury, which in turn sets the new total number of voting rights and affects how shareholders calculate disclosure thresholds under UK transparency rules.

The most recent analyst rating on (GB:GYM) stock is a Hold with a £176.00 price target. To see the full list of analyst forecasts on The Gym stock, see the GB:GYM Stock Forecast page.

Stock BuybackRegulatory Filings and Compliance
The Gym Group Reduces Share Capital Through Further Buyback and Cancellation
Neutral
Jan 16, 2026

The Gym Group plc has continued its share buyback activity, repurchasing 20,827 ordinary shares on 15 January 2026 at prices between 164.40p and 165.00p per share, with a volume-weighted average price of 164.98p. The company intends to cancel the repurchased shares, reducing its issued share capital to 179,624,146 shares with no shares held in treasury, thereby setting the new total voting rights at 179,624,146, a figure shareholders will use for regulatory disclosure calculations under UK transparency rules.

The most recent analyst rating on (GB:GYM) stock is a Hold with a £171.00 price target. To see the full list of analyst forecasts on The Gym stock, see the GB:GYM Stock Forecast page.

Business Operations and StrategyStock Buyback
The Gym Group Launches £10m Share Buyback to Cut Share Capital
Positive
Jan 15, 2026

The Gym Group plc has launched a share buyback programme of up to £10 million, with purchases of ordinary shares to begin immediately and run until 31 December 2026 unless completed or terminated earlier. The company has appointed Peel Hunt LLP to execute the buyback independently on the London Stock Exchange, with all repurchased shares to be sold on to The Gym Group and cancelled, reducing the company’s share capital and returning cash to shareholders. The programme is subject to existing and future shareholder authorities and will be carried out in line with UK market abuse regulations and listing rules, underscoring the company’s intent to manage its capital structure actively and potentially enhance shareholder value.

The most recent analyst rating on (GB:GYM) stock is a Buy with a £179.00 price target. To see the full list of analyst forecasts on The Gym stock, see the GB:GYM Stock Forecast page.

Business Operations and StrategyStock BuybackFinancial Disclosures
The Gym Group Lifts Guidance, Accelerates UK Rollout and Launches £10m Buyback
Positive
Jan 13, 2026

The Gym Group reported continued positive trading momentum in 2025, with revenue up 8% to £244.9m, like-for-like sales growing 3%, and average membership and revenue per member both increasing 4%. The group expects full-year 2025 adjusted EBITDA (less normalised rent) to come in slightly above the top end of analyst forecasts, has reduced net debt to £59.3m versus expectations, and is guiding that 2026 EBITDA will again exceed consensus, underlining confidence in its business model and growth strategy. Operationally, the company opened 16 new sites to reach 260 gyms, is seeing strong performance from its 40 enhanced-format locations, and plans to accelerate expansion with about 75 new sites over the next three years—around 20 of them in 2026—funded from free cash flow while continuing to reinvest in its existing estate and technology. Reflecting strong cash generation and surplus financing capacity, the board intends to launch a share buyback programme of up to £10m, to be completed by end-2026, signalling management’s confidence in future prospects and offering potential value uplift for shareholders alongside the company’s accelerated rollout plans.

The most recent analyst rating on (GB:GYM) stock is a Hold with a £157.00 price target. To see the full list of analyst forecasts on The Gym stock, see the GB:GYM Stock Forecast page.

Regulatory Filings and Compliance
The Gym Group Confirms Total Voting Rights at Year-End 2025
Neutral
Jan 2, 2026

The Gym Group plc has confirmed that as of 31 December 2025 its issued share capital comprises 179,622,261 ordinary shares, each carrying one vote, with no shares held in treasury. This establishes the total number of voting rights in the company at 179,622,261, a key reference figure for shareholders in determining whether they must disclose holdings or changes in their interests under the UK Disclosure Guidance and Transparency Rules.

The most recent analyst rating on (GB:GYM) stock is a Hold with a £157.00 price target. To see the full list of analyst forecasts on The Gym stock, see the GB:GYM Stock Forecast page.

Business Operations and StrategyDelistings and Listing Changes
The Gym Group Seeks Block Listing for 45,000 Shares
Positive
Dec 15, 2025

The Gym Group has applied for a block listing of 45,000 ordinary shares on the London Stock Exchange, which will be issued under a supplier agreement. This move is expected to enhance the company’s financial flexibility and support its operational strategies by aligning new shares with existing ones, potentially impacting its market positioning positively.

The most recent analyst rating on (GB:GYM) stock is a Hold with a £157.00 price target. To see the full list of analyst forecasts on The Gym stock, see the GB:GYM Stock Forecast page.

Financial Disclosures
The Gym Group to Release Pre-Close Trading Update for 2025
Neutral
Dec 12, 2025

The Gym Group has announced its intention to release a pre-close trading update for the fiscal year ending December 31, 2025, on January 13, 2026. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and operational progress, potentially impacting its market positioning and investor confidence.

The most recent analyst rating on (GB:GYM) stock is a Hold with a £157.00 price target. To see the full list of analyst forecasts on The Gym stock, see the GB:GYM Stock Forecast page.

Regulatory Filings and Compliance
The Gym Group PLC Announces Total Voting Rights Update
Neutral
Oct 31, 2025

The Gym Group PLC announced that as of 31 October 2025, its issued share capital comprises 179,370,499 ordinary shares, each with a voting right. This information is crucial for shareholders to determine their notification requirements under the UKLA’s Disclosure Guidance and Transparency Rules, impacting how they manage their investments in the company.

The most recent analyst rating on (GB:GYM) stock is a Buy with a £180.00 price target. To see the full list of analyst forecasts on The Gym stock, see the GB:GYM Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Dec 07, 2025