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On Friday, Guggenheim raised its price target for Life Time Group Holdings Inc (NYSE:LTH) shares to $36 from $32, while maintaining a Buy rating on the stock. Currently trading at $31.3, LTH has demonstrated remarkable momentum with a 128.3% return over the past year and a 33.08% gain in the last six months. The firm’s analyst highlighted Life Time Group’s ongoing growth story, emphasizing the company’s strong performance even as broader market concerns arose due to tariff-related macro fears.
Life Time Group reported significant growth, with revenues reaching $2.62 billion, an 18.24% increase, while earnings showed strong momentum. According to InvestingPro data, the company maintains a "GOOD" overall Financial Health Score of 2.83, supporting the analyst’s positive outlook. The analyst pointed out that the company’s success is likely to continue in the near term. This optimistic outlook is based on several factors, including the company’s ability to meet service needs and appeal to favorable demographics, a strengthening financial position that could support further club expansion, and an anticipated multi-year uptick in growth.
The report mentions that Life Time Group’s EBITDA multiple, currently at 10.7 times the 2025 estimate, could see considerable expansion. With current EBITDA at $632.16 million and analyst targets ranging from $22 to $43, the stock trades at a P/E ratio of 34.8x. In light of these factors, Guggenheim has increased its revenue and EBITDA forecasts for the years 2025-2027. The analyst also suggests that while the price target has been raised to $36, there could be a potential path to a $50 target in the future.
The endorsement from Guggenheim comes as a positive note for Life Time Group, underscoring the company’s robust financial performance and growth potential amidst a challenging environment for discretionary businesses. The analyst’s remarks reiterate confidence in the company’s strategy and market position, suggesting that Life Time Group is well-positioned for continued success. For deeper insights into LTH’s valuation and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s financial health, growth metrics, and future potential.
In other recent news, Life Time Group Holdings Inc. reported its Q4 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.27, significantly higher than the forecasted $0.11. The company also reported revenue of $663.3 million, exceeding projections by $19.55 million, marking a robust finish to the fiscal year with an 18.7% year-over-year revenue growth. In addition, Life Time announced a secondary stock offering of 23 million shares, expected to generate approximately $699.2 million in gross proceeds, although the company itself will not receive any financial benefit from this sale. S&P Global has revised Life Time’s outlook to positive from stable, citing better-than-expected 2024 results and a supportive financial policy, with expectations of continued revenue growth and a reduction in leverage. The company is projected to increase its revenue by 12%-15% in 2025, aligning with management’s guidance, and plans to open 10-12 new clubs as part of its asset-light growth strategy. Additionally, Life Time has launched new products and services, such as LT Digital and Miura, contributing to increased memberships and average monthly dues. These developments reflect the company’s strategic focus on expanding its offerings and enhancing member experiences while maintaining strong financial performance.
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