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RBC Capital analyst Logan Reich reiterated an Outperform rating on Life Time Group Holdings Inc (NYSE:LTH) Wednesday, maintaining a $38.00 price target on the fitness center operator’s stock. According to InvestingPro data, the stock has delivered an impressive 45% return over the past year, with analysts’ targets ranging from $28 to $45.
The reaffirmation follows meetings with Life Time executives during a non-deal roadshow this week, including CFO Erik Weaver and VP of Investor Relations Connor Wienberg, according to RBC Capital’s research note.
The investment firm cited several factors supporting its positive outlook, including Life Time’s long-term unit growth potential, pricing power, and attractive valuation at approximately 8.5 times enterprise value to estimated 2026 EBITDA. The company’s current EV/EBITDA ratio stands at 14.7x, while revenue growth reached 18.6% in the last twelve months. InvestingPro analysis reveals 6 additional key insights about LTH’s financial health and growth prospects.
RBC Capital noted potential upside to Life Time’s current expansion target of 10-12 new locations annually, though management emphasized execution quality over speed. The research firm also highlighted management’s belief that long-term same-store sales growth would range between 6-8%.
Additional positive factors mentioned in the research note included expectations for continued margin expansion and management’s expressed interest in repurchasing shares at current price levels, alongside improving balance sheet metrics and free cash flow. The company maintains a healthy gross profit margin of 47.2% and has generated $158 million in levered free cash flow over the past twelve months.
In other recent news, Life Time Group Holdings Inc. reported its first-quarter 2025 earnings, which exceeded Wall Street expectations. The company posted an earnings per share (EPS) of $0.39, surpassing the projected $0.26, and reported revenues of $706 million, higher than the anticipated $684.49 million. Despite these positive results, the company announced a secondary offering of 20 million shares by affiliates of Leonard Green & Partners, L.P. and TPG Inc., valued at $590 million, with no financial benefit to Life Time itself. This offering is part of a restructuring of the company’s ownership, which will see the selling stockholders holding around 43.1% of the company’s common stock post-offering. RBC Capital Markets responded to these developments by raising its price target on Life Time Group shares to $38.00, up from $35.00, while maintaining an Outperform rating. The firm noted the company’s effective pricing strategies and projected growth in its centers. J.P. Morgan and BofA Securities are acting as underwriters for the secondary offering. Life Time Group Holdings has also raised its full-year comparable center revenue guidance to 8.5-9.5%, indicating confidence in its growth strategy.
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