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On Friday, RBC Capital Markets increased its price target on shares of Life Time Group Holdings Inc (NYSE:LTH) to $38.00, up from the previous target of $35.00, while maintaining an Outperform rating on the company. The stock, which has delivered an impressive 107% return over the past year according to InvestingPro data, currently trades at $28.45 with a market capitalization of $6.7 billion. The adjustment follows Life Time Group’s first-quarter earnings, which surpassed expectations, particularly noting that in-center revenue outpaced dues revenue growth. This trend suggests that existing members remain willing to spend on the company’s services. InvestingPro data shows the company achieved an 18.6% revenue growth in the last twelve months, with EBITDA reaching $676 million.
The analyst from RBC Capital highlighted Life Time Group’s sustained ability to manage its pricing effectively, with selective price increases being implemented regularly. The company is expected to continue this trend, with projections for center growth in 2026 to surpass that of 2025, unless there is a significant economic downturn. These insights address some areas where investors had previously shown confusion regarding the company’s performance and strategy.
Despite a slight softening in member growth during the first quarter and April, RBC Capital’s analyst believes this to be a temporary setback. The expectation is that the upcoming pool season will drive a resurgence in membership numbers, as it is typically a period of strong growth for the company. The analyst reaffirmed the Outperform rating, indicating confidence in Life Time Group’s business model and growth prospects.
Life Time Group’s recent financial performance, combined with strategic price management and anticipated growth in the number of centers, paints a positive picture for the company’s future. The raised price target by RBC Capital reflects an optimistic outlook for the company’s stock, backed by the belief that the current slowdown in member growth is only a short-term challenge. With analyst targets ranging from $28 to $45 and an overall financial health score of "GOOD" according to InvestingPro, investors seeking deeper insights can access comprehensive analysis and additional ProTips through the platform’s detailed research reports.
In other recent news, Life Time Group Holdings Inc. reported its first-quarter 2025 earnings, surpassing Wall Street’s expectations. The company achieved an earnings per share (EPS) of $0.39, significantly higher than the forecasted $0.26, and reported revenues of $706 million, exceeding the anticipated $684.49 million. Life Time Holdings also demonstrated a 206% increase in net income, reaching $76.1 million, and a 31.2% rise in adjusted EBITDA to $191.6 million. Despite these strong financial results, the company’s stock experienced a decline in pre-market trading due to broader market concerns. Furthermore, Life Time Holdings raised its full-year comparable center revenue guidance to 8.5-9.5% and plans to open 10-12 new clubs in 2025. The company has also signed a letter of intent for a sale-leaseback of three properties, expected to generate approximately $150 million. Analysts from Guggenheim and Oppenheimer noted the company’s robust performance and strategic adaptability, highlighting its focus on maintaining a strong balance sheet amidst economic uncertainties.
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