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On Wednesday, Guggenheim reiterated its Buy rating on Life Time Group Holdings Inc (NYSE:LTH) shares with a price target of $36.00. Guggenheim’s analysis suggests that despite the stock having doubled in value over the past year, outperforming the S&P 500’s approximate 6% gain, it still trades at an attractive 10.2 times the estimated 2025 EBITDA multiple.
The firm’s stance is supported by several factors that indicate Life Time Group’s promising financial outlook. The company has demonstrated strong momentum with an 18.24% revenue growth in the last twelve months, and analysts expect 13% growth in FY2025. Guggenheim believes that the combination of sustainable growth, improving profit margins, and increased financial flexibility justifies an EBITDA Price/Earnings to Growth (PEG) ratio above 1.0x. They expect that the company’s ability to expand through multiple club growth channels and further penetrate the market of high-income households will lead to sales increases of 10-12%.
Furthermore, Guggenheim points out that Life Time Group’s owned-club business model, while not as profitable as a franchised model, still boasts a notable 27% EBITDA margin, which surpasses many of its peers. The company maintains a healthy gross profit margin of 46.87%, and its current EBITDA stands at $635.56 million. Additionally, the company’s $3 billion in owned real estate is seen as an added value.For investors seeking deeper insights, InvestingPro offers 8 additional key tips and comprehensive financial metrics, including detailed profitability analysis and growth projections. The platform’s exclusive Pro Research Report provides in-depth analysis of LTH’s financial health and market position.
Projecting forward, Guggenheim applies a 1.1x PEG ratio, or a 12.5 times EBITDA multiple, to their estimated 2026 EBITDA of approximately $875 million, which suggests a potential future stock price of $45. The firm’s reiterated Buy rating and $36 price target reflect their confidence in Life Time Group’s growth trajectory and financial performance. Investors should note that the company’s next earnings report is scheduled for May 8, 2025.
In other recent news, Life Time Group Holdings Inc. has reported strong fourth-quarter earnings, leading to upward revisions in its future financial guidance. The company has seen significant growth, with revenues increasing by 19% and earnings rising by 28%. Analysts from firms like Mizuho (NYSE:MFG), Craig-Hallum, and Guggenheim have responded positively, raising their price targets for the company to $41, $45, and $36, respectively, while maintaining favorable ratings. Mizuho highlighted the company’s robust member retention and increased in-center revenue, projecting a promising fiscal year 2025 with an EBITDA estimate of $797 million. Craig-Hallum noted the rise in new-member prices and the potential for further growth through initiatives like wellness clinics and digital app monetization. Guggenheim emphasized Life Time’s ability to meet service needs and its strong financial position, suggesting a multi-year growth trajectory. In addition to financial developments, Life Time has expanded its LTH supplement line to Amazon (NASDAQ:AMZN), aiming to increase accessibility and meet the demand for high-quality nutritional products. The company continues to innovate with the launch of NOURISH, a new multivitamin and greens powder, as part of its broader supplement line expansion.
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