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On Wednesday, Mizuho (NYSE:MFG) Securities exhibited confidence in Life Time Group Holdings Inc (NYSE:LTH), increasing the company’s stock price target from $38.00 to $41.00 while keeping an Outperform rating on the shares. Currently trading at $31.61, the stock has shown remarkable momentum with a 42.9% gain year-to-date. The firm’s analyst cited the company’s strong performance in the fourth quarter, which ended fiscal year 2024 on a high note, and the positive outlook for fiscal year 2025, suggesting that the guidance for the year is well within reach. According to InvestingPro data, 4 analysts have recently revised their earnings expectations upward for the upcoming period.
Life Time Group, known for its health and wellness services, has demonstrated record member retention alongside record membership dues, which has contributed to a significant in-center revenue increase, with revenue growing 18.24% in the last twelve months. This reflects a business model gaining widespread momentum. The company is also in the process of launching new growth initiatives, including digital enhancements, recovery services, and branded nutritional supplements. InvestingPro subscribers can access 10+ additional exclusive insights about Life Time Group’s growth potential and financial health metrics.
The analyst’s optimism is rooted in the expectation of a normalized annual EBITDA growth of over 10% and a normalized EBITDA margin expected to exceed 26%. This aligns with the initial investment thesis. Following the company’s post-fourth-quarter earnings per share secondary share offering, the market is anticipated to benefit from increased liquidity.
Mizuho has adjusted its EBITDA forecasts for Life Time Group, raising its estimate for fiscal year 2025 to $797 million from the previous $777 million, and for fiscal year 2026 to $887 million from $869 million. The price target adjustment to $41 is based on 17 times the projected calendar year 2025 EBITDA, which is consistent with the valuation of peers in the healthy living sector.
In other recent news, Life Time Group Holdings Inc. reported impressive fourth-quarter 2024 earnings, with an earnings per share (EPS) of $0.27, significantly surpassing the analyst forecast of $0.11. The company also exceeded revenue expectations, reporting $663.3 million against a projected $643.75 million. Following these results, Craig-Hallum analyst Alex Fuhrman raised the price target for Life Time Group to $45, reflecting confidence in the company’s upwardly revised EBITDA guidance for 2025. Similarly, Guggenheim increased its price target for Life Time Group to $36, emphasizing the company’s strong financial performance and growth potential.
Additionally, Life Time Group announced a secondary stock offering expected to generate approximately $699.2 million in proceeds for selling stockholders, with J.P. Morgan and BofA Securities managing the underwriting process. S&P Global revised Life Time’s outlook to positive from stable, citing better-than-expected 2024 results and a supportive financial policy. The company is also expected to see a 12%-15% revenue increase in 2025, aligning with management’s guidance.
These recent developments underscore Life Time Group’s robust financial performance and strategic initiatives, including its focus on expanding membership and enhancing digital offerings. The company anticipates continued growth, supported by its asset-light strategy and strong membership retention.
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