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Life Time Group Holdings (LTH)
NYSE:LTH
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Life Time Group Holdings
(NYSE:LTH)
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Rating:65Neutral
Price Target:
$31.00
▲(17.11% Upside)
Action:ReiteratedDate:02/25/26
The score is driven primarily by improving profitability and strong operating cash flow, reinforced by an upbeat earnings call featuring leverage improvement and a $500M repurchase program. These positives are tempered by still-meaningful leverage, slightly negative free cash flow amid heavy investment plans, and near-term technical softness versus the 20-day trend with moderating 2026 growth guidance.
Positive Factors
Operating cash generation
Sustained, above‑earnings operating cash flow (~$871M TTM) indicates high cash conversion from core club operations. This durable cash generation supports capex funding, sale‑leaseback financing, and the $500M buyback while enabling debt paydown and strategic reinvestment over the next 2–6 months.
Margin improvement & scale
Material margin expansion across operating, EBITDA and net lines reflects improved pricing, higher ARPU and stronger in‑center revenue mix. These structural margin gains signal better unit economics and resilience to input cost variability, supporting sustainable profitability as the business scales its club base.
Improving leverage and capital allocation
Reduced leverage to 1.6x and a BB rating provide financial flexibility to pursue growth while returning capital. Management's ability to lower net leverage and authorize a large repurchase shows balance‑sheet repair and disciplined capital allocation, enabling share repurchases without starving expansion plans.
Negative Factors
High capital intensity
Substantially higher growth CapEx planned for 2026 will tie up cash in work‑in‑progress and raise capitalized interest (~$33–$35M expected). Slightly negative FCF TTM highlights that heavy investment can compress free cash flow and limit near‑term optionality for deleveraging or incremental buybacks if execution or ramping slips.
Execution risk on openings
The company plans many new large‑format clubs (13 under construction; up to 28 clubs 2026–2027). Construction and permitting hiccups observed in MIORA rollouts create a durable execution risk: delays can push revenue recognition, increase build costs, and defer expected returns on substantial growth CapEx.
One‑time items boosting results
A meaningful portion of recent reported earnings and operating cash flow stemmed from one‑offs, reducing the permanence of reported improvement. If nonrecurring proceeds reverse, underlying margins and cash conversion could be weaker, and mixed digital monetization limits immediate alternative revenue growth levers.
Life Time Group Holdings (LTH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.14B
Dividend YieldN/A
Average Volume (3M)2.10M
Price to Earnings (P/E)16.0
Beta (1Y)0.98
Revenue Growth15.77%
EPS Growth86.16%
CountryUS
Employees43,000
SectorConsumer Cyclical
Sector Strength84
IndustryLeisure
Share Statistics
EPS (TTM)0.54
Shares Outstanding221,805,080
10 Day Avg. Volume1,630,812
30 Day Avg. Volume2,096,732
Financial Highlights & Ratios
PEG Ratio0.13
Price to Book (P/B)1.85
Price to Sales (P/S)1.93
P/FCF Ratio-276.52
Enterprise Value/Market Cap1.35
Enterprise Value/Revenue2.76
Enterprise Value/Gross Profit3.11
Enterprise Value/Ebitda9.61
Forecast
1Y Price Target
$41.00Price Target Upside54.89% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)1.47
Revenue Forecast (FY)$3.32B
Life Time Group Holdings Business Overview & Revenue Model
Company DescriptionLife Time Group Holdings, Inc. provides health, fitness, and wellness experiences to a community of individual members in the United States and Canada. It primarily engages in designing, building, and operating sports and athletic, professional fitness, family recreation, and spa centers in a resort-like environment, principally in suburban and urban locations of metropolitan areas. The company also offers fitness floors with equipment, locker rooms, group fitness studios, indoor and outdoor pools, bistros, indoor and outdoor tennis courts, basketball courts, LifeSpa, LifeCafe, and childcare and Kids Academy learning spaces. Its Life Time Digital provides live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support, curated award-winning health, and fitness and wellness content, as well as access to Apple Fitness+ that offers members content and wellness data monitoring. The company is also involved in media activities, conducting athletic events, and provision of related services. As of December 31, 2021, it operated 151 centers in 29 states and one Canadian Province, 63 of which were owned, including ground leases and 88 of which were leased. The company was formerly known as LTF Holdings, Inc. and changed its name to Life Time Group Holdings, Inc. in June 21, 2021. Life Time Group Holdings, Inc. was founded in 1992 and is headquartered in Chanhassen, Minnesota.
How the Company Makes MoneyLife Time generates revenue primarily through membership fees, which are the core of its business model. Members pay monthly or annual dues for access to the company's facilities and services. Additional revenue streams include personal training sessions, group fitness classes, nutrition coaching, and spa services. The company also earns income from retail sales of health-related products, including supplements and fitness apparel, as well as revenue from its events and competitions. Partnerships with fitness and wellness brands, as well as corporate wellness programs, contribute to its earnings. Additionally, Life Time's expansion into residential community development provides opportunities for revenue through property sales and management.
Life Time Group Holdings Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call reflects strong financial and operational performance in 2025: robust revenue and adjusted EBITDA growth, margin expansion, significant operating cash flow, improved leverage (1.6x) and a new $500 million share repurchase authorization. These positives are tempered by reliance on nonrecurring items that bolstered reported results, a clear deceleration in comparable-center guidance for 2026 (6.3%–7.3%), and substantially higher near-term growth CapEx that will tie up cash and increase capitalized interest. Management emphasizes prudent margin management to protect member experience and highlighted some execution risks (construction/permits) and mixed direct-digital monetization. On balance, the strength in core metrics, balance sheet flexibility, and shareholder return initiatives outweigh the headwinds and execution/monetization caveats.Q4-2025 Updates
Positive Updates
Quarterly Revenue Growth
Total revenue for Q4 increased 12.3% year-over-year to $745.0 million, driven by higher average dues and utilization in centers.
Membership and ARPU Strength
Average monthly dues rose to $223, up ~10.8% YoY; average revenue per center membership for the quarter was $882, up 10.8% YoY. Full-year average revenue per center membership increased 11.7% to $3,531.
Comparable Center Performance
Comparable center revenue grew 9.9% in Q4 and 11.1% for full-year 2025, reflecting durable same-store demand and strong in-center execution.
Membership Scale and Utilization
Ended 2025 with over 822,000 center memberships (approximately 873,000 including on-hold). Average monthly visits per membership were 12.5 for the year (+4.8% vs. 2024) and aggregate visits were ~122 million (+7% vs. 2024).
Profitability and Margin Expansion
Q4 adjusted EBITDA was $203 million (+14.5% YoY) with adjusted EBITDA margin improving 50 basis points to 27.2%. Full-year adjusted EBITDA rose 21.9% to $825 million with margin up 170 basis points to 27.5%.
Earnings and EPS Growth (Adjusted)
Q4 adjusted net income was $77 million (+28.4% YoY). Full-year adjusted net income increased 62.3% to $326 million. Adjusted diluted EPS rose 51.6% to $1.44.
Operating Cash Flow and Balance Sheet Strength
Net cash provided by operating activities was $240 million in Q4 (+~47% YoY) and $871 million for the full year (+~51% YoY). Net leverage ended 2025 at 1.6x, below the 2x target, and the company secured a BB credit rating.
Capital Allocation & Shareholder Return
Announced a $500 million share repurchase program approved by the Board and plans to fund growth via operating cash flow, sale-leasebacks (minimum $300 million expected in 2026) and cash on hand.
Growth Investment and Expansion Pipeline
Total capital expenditures for 2025 were $892 million (including $657 million growth CapEx). For 2026 the company expects $875–$915 million of growth CapEx and plans to open up to 28 clubs across 2026–2027, nearly doubling square footage opened versus prior years.
Product / Format Rollouts and Digital Scale
MIORA rollout accelerating (7–8 locations open and ramping at or above expectations), and digital subscriber base reported roughly 3.3 million subscribers, offering a conversion/engagement channel into dues-paying memberships.
Strong In-Center Revenue Drivers
In-center revenue increased 15.1% for the full year, and categories like personal training (DPT) have seen strong growth (sessions up ~18% over the last two years).
Negative Updates
One-Time Items Inflating Reported Results
Q4 net income benefited from approximately $45.6 million of net tax-affected nonrecurring items; Q4 operating cash flow included $59 million and full-year operating cash flow included $94 million of nonrecurring proceeds. These one-time items materially boosted reported GAAP results and cash flow.
Guidance Shows Moderation in 2026 Growth
Management expects full-year 2026 comparable center revenue growth of ~6.3%–7.3%, a notable slowdown from 11.1% comparable growth in 2025, and forecasts a glide lower through the quarters in 2026 as prior-year mature-club outperformance is largely complete.
Elevated Capital Intensity and Cash Timing
Significantly higher growth CapEx planned for 2026 ($875–$915 million) with over half earmarked for clubs opening in 2027 and beyond, increasing capital tied up in work-in-progress and leading to capitalized interest expectations of $33–$35 million in 2026.
Digital / Retail Monetization Mixed
While digital subscribers (~3.3 million) provide scale, management described digital monetization and direct-to-consumer supplement (LT Health) digital performance as 'so-so' and requiring more education; in-club retail is the primary near-term channel for growth.
Operational / Opening Hiccups
Some MIORA openings experienced construction or permit challenges that delayed full ramp, indicating execution risk on new-format rollouts despite strong ramps where openings were clean.
Legacy Pricing Complexity
A persistent mix of legacy (discounted) members vs. rack-rate members creates a differential that management monitors (referenced legacy monthly figure in the ~$17M–$20M range), complicating pricing capture and long-term convergence of rack/average dues.
Lack of Explicit Membership Guidance
Management did not provide a formal membership count guide for 2026, which adds uncertainty to investor modeling of unit growth vs. price/usage-driven revenue.
Intentional Margin Conservatism
Management cautioned against treating elevated margins as a new norm and emphasized a willingness to forego higher short-term margin to protect member experience, which could limit upside surprise to margins going forward.
Company Guidance
For 2026 Life Time guided to full‑year comparable center revenue growth of approximately 6.3%–7.3%, with quarterly growth starting higher and gliding down; it plans $875–$915 million of growth CapEx (noting over half of that will fund clubs opening in 2027+), plus $140–$150 million of maintenance CapEx and $130–$140 million for modernization, technology and corporate investments, and expects to capitalize $33–$35 million of interest. Management intends to fund this with cash from operations, sale‑leasebacks and cash on hand, expects to complete a minimum of $300 million of sale‑leasebacks in 2026, has opened 1 of 14 planned 2026 clubs (13 under construction), plans to open up to 28 clubs across 2026–2027, is nearly doubling 2026 square footage versus 2024/2025, has approved a $500 million share repurchase program, and will manage net leverage at or below its 2.0x target (ending 2025 at 1.6x).Life Time Group Holdings Financial Statement Overview
Summary
Income statement strength is clear (Income Statement Score 78) with meaningfully improved profitability and net margins in the TTM period, but financial flexibility is constrained by leverage (Balance Sheet Score 62) and mixed cash conversion (Cash Flow Score 52) as free cash flow is slightly negative despite strong operating cash flow.Income Statement
Profitability and operating momentum have improved meaningfully over the last several years. TTM (Trailing-Twelve-Months) revenue is about $3.0B with solid operating profitability (about 15.8% operating margin and 25.7% EBITDA margin) and a stronger net margin (~9.9%) versus 2024 (~6.0%) and 2023 (~3.4%). Revenue growth has moderated in TTM (~2.8%) after stronger growth in 2022–2024, so the trajectory is positive but appears to be normalizing as the base gets larger.78
Positive
Balance Sheet
Leverage remains the key constraint. TTM (Trailing-Twelve-Months) debt is ~$2.66B against equity of ~$3.13B (debt-to-equity ~1.38x), which is improved from 2023–2024 (~1.53x to ~1.89x), indicating balance sheet repair. Returns have also strengthened (TTM return on equity ~10.3%), but leverage is still meaningful for a Leisure business and can limit flexibility if growth or demand softens.62
Positive
Cash Flow
Cash generation is mixed: operating cash flow in TTM (Trailing-Twelve-Months) is strong at ~$871M and exceeds accounting earnings (operating cash flow to net income ~1.29x), which is a quality positive. However, free cash flow turned slightly negative in TTM (about -$21M) after being positive in 2024 (~$51M) and deeply negative in 2022–2023, suggesting elevated investment spending and less near-term cash available for debt reduction or shareholder returns.52
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.00B | 2.62B | 2.22B | 1.82B | 1.32B |
| Gross Profit | 2.66B | 1.23B | 1.03B | 754.35M | 473.95M |
| EBITDA | 872.11M | 632.16M | 469.98M | 339.50M | -260.07M |
| Net Income | 373.67M | 156.24M | 76.06M | -1.79M | -579.37M |
Balance Sheet | |||||
| Total Assets | 8.79B | 7.15B | 7.03B | 6.63B | 6.26B |
| Cash, Cash Equivalents and Short-Term Investments | 232.17M | 10.88M | 29.97M | 25.51M | 31.64M |
| Total Debt | 6.75B | 3.99B | 4.26B | 4.04B | 3.76B |
| Total Liabilities | 5.66B | 4.54B | 4.78B | 4.50B | 4.17B |
| Stockholders Equity | 3.13B | 2.61B | 2.25B | 2.12B | 2.09B |
Cash Flow | |||||
| Free Cash Flow | -20.96M | 50.58M | -230.90M | -390.21M | -348.94M |
| Operating Cash Flow | 870.52M | 575.12M | 463.00M | 200.97M | -20.03M |
| Investing Cash Flow | -685.74M | -292.74M | -574.16M | -243.54M | -269.92M |
| Financing Cash Flow | 19.39M | -284.38M | 115.55M | 36.80M | 288.40M |
Life Time Group Holdings Technical Analysis
Negative
26.47
Price Trends
27.99
Negative
26.94
Negative
27.78
Negative
Market Momentum
-0.08
Positive
32.56
Neutral
29.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LTH, the sentiment is Negative. The current price of 26.47 is below the 20-day moving average (MA) of 29.10, below the 50-day MA of 27.99, and below the 200-day MA of 27.78, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 32.56 is Neutral, neither overbought nor oversold. The STOCH value of 29.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LTH.
Life Time Group Holdings Risk Analysis
Life Time Group Holdings disclosed 32 risk factors in its most recent earnings report. Life Time Group Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Life Time Group Holdings Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.22B | 31.66 | 13.53% | 0.79% | 7.27% | 45.12% | |
67 Neutral | $14.01B | -42.44 | -37.42% | 3.44% | 0.87% | 14.02% | |
65 Neutral | $6.14B | 15.98 | 10.38% | ― | 15.77% | 86.16% | |
64 Neutral | $6.88B | 30.58 | ― | ― | 14.39% | 31.64% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
52 Neutral | $1.72B | -32.26 | ― | ― | -8.74% | 74.66% | |
52 Neutral | $401.27M | -5.00 | ― | ― | -3.55% | -111.90% |
* Consumer Cyclical Sector Average
LTH
Life Time Group Holdings
26.47
-4.83
-15.43%
HAS
Hasbro
99.75
36.71
58.23%
PLNT
Planet Fitness
80.05
-11.33
-12.40%
OSW
OneSpaWorld Holdings
21.82
3.40
18.47%
PTON
Peloton Interactive
4.12
-3.31
-44.55%
XPOF
Xponential Fitness
8.23
-4.72
-36.45%
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.