Life Time Group Stock Up 37% in 3 Months: Time to Buy, Hold or Sell?

Life Time Group Holdings, Inc. LTH has skyrocketed 36.6% in the past three months, significantly outpacing the industry and the S&P 500’s decline of 11.1% and 6.3%, respectively.

The company is benefiting from membership growth, higher pricing power and solid demand for its premium fitness and wellness services.

LTH Hovering Near Its 52-Week High

As of Wednesday, the stock closed at $31.29, below its 52-week high of $33.64 but well above 52-week low of $12.34. In the past three months, LTH has also outperformed industry players like Planet Fitness, Inc. PLNT, Six Flags Entertainment Corporation FUN and Xponential Fitness, Inc. XPOF.

LTH’s Three-Month Price Performance

Life Time Group’s Upward Estimate Revisions Signal Strength

Analysts are growing increasingly optimistic about LTH’s earnings potential. Over the past 60 days, the Zacks Consensus Estimate for LTH’s 2025 EPS has risen from $1.24 to $1.31, reflecting a positive shift in sentiment.

The company is poised for robust earnings growth, with projections indicating a 37.9% jump in 2025, followed by a 19.2% increase in 2026. Meanwhile, revenue growth has been strong, with forecasts indicating a 12.9% year-over-year jump in 2025 and a 10.2% rise in 2026, reinforcing confidence in Life Time Group’s long-term trajectory.

Membership Growth & Pricing Strategy Aid LTH

Robust membership growth continues to aid the company. In fourth-quarter 2024, the company’s membership dues and enrollment increased 18% year over year. Higher member engagement in services beyond basic memberships, such as personal training, spa services, and food and beverage offerings, continues to boost overall revenue streams.

The company reported a 6.4% increase in memberships, bringing the total to 812,062 by the end of the quarter. When including digital on-hold memberships, total memberships reached approximately 866,000.

Additionally, average monthly dues rose to $201, reflecting a 10% increase from the prior year's fourth quarter. The average revenue per center membership climbed to $796, marking 12% year-over-year growth.

In an effort to increase average revenues per membership, the company successfully implemented pricing strategies. This demonstrates the company’s ability to pass on costs while maintaining customer retention. 

LTH is also focusing on an expansion strategy to drive growth. The company anticipates opening 10-12 clubs in 2025. Life Time Group expects to increase the number of new openings in 2026 and 2027. 

The company’s nutritional supplements continue to witness consistent monthly growth. LTH also intends to leverage operating cash flow and proceeds from sale-leaseback transactions to accelerate new club openings, capitalizing on its strong development pipeline. The Life Time brand continues to drive asset-light growth, supported by LT Digital, a free digital subscription launched in February, which has surpassed 1.7 million subscribers and is adding more than 100,000 subscribers monthly without marketing efforts.

LTH Trades at a Premium

Life Time Group is trading at a premium on a forward 12-month price-to-earnings (P/E) ratio basis. LTH’s forward 12-month P/E ratio is 22.85, higher than the industry. Then again, other industry players like Planet Fitness, Six Flags Entertainment and Xponential Fitness’ P/E ratios are 32.57, 19.36 and 9.03, respectively.

Life Time Group’s P/E Ratio (Forward 12 Months)

LTH’s Investment Strategy

LTH continues to benefit from robust membership growth, effective pricing strategies and increasing demand for its premium fitness and wellness offerings.  Additionally, its digital platform is scaling rapidly, adding significant value to LTH’s brand without marketing expenses. Analysts’ upward earnings estimate revisions further reinforce confidence in the company’s long-term trajectory. Although trading at a premium, LTH’s growth potential, operational efficiencies and strategic initiatives make it an attractive investment opportunity. LTH currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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