Life Time (LTH): Evaluating Valuation After Announcing New Gowanus Wharf Athletic Country Club Expansion
Life Time Group Holdings (LTH) is back in the spotlight after unveiling plans for a sprawling athletic country club at Brooklyn’s Gowanus Wharf, a move that neatly reinforces its mixed use, wellness centric growth strategy.
See our latest analysis for Life Time Group Holdings.
Investors seem to be weighing this kind of flagship expansion against broader market risks, with a 13.89% year to date share price return but a softer 9.63% total shareholder return over the past year. This suggests momentum is cooling slightly after a strong three year run.
If you like the Life Time story but want more ideas in the same broad space, this could be a good moment to explore fast growing stocks with high insider ownership.
With double digit growth and a stock still trading at a steep discount to analyst targets, is Life Time quietly undervalued, or is the market already baking in years of wellness led expansion and future earnings power?
Most Popular Narrative Narrative: 36.1% Undervalued
With the narrative fair value sitting well above Life Time’s last close at $25.50, the gap between market price and projected potential stands out.
The expanding pipeline of new and larger club openings in affluent and high-density markets positions Life Time for sustained membership and top-line revenue growth, benefiting from the growing consumer demand for premium health, wellness, and lifestyle experiences. Accelerating growth in ancillary, higher-margin services including personal training, Life Time Digital offerings, nutritional supplements, and health or wellness programs supports increased average revenue per member and improved net margins as consumer expectations shift toward holistic wellness.
Want to see why this narrative assigns such a rich future earnings profile to a fitness operator, and which growth and margin upgrades underpin that confidence? Dig into the full story to uncover the assumptions the market may be missing.
Result: Fair Value of $39.91 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this upside depends on execution, as capital intensive club expansion and a premium pricing focus could quickly pressure margins if economic conditions deteriorate.
Find out about the key risks to this Life Time Group Holdings narrative.
Another View: Market Multiple Sends A Different Signal
While the narrative fair value suggests Life Time is 36.1% undervalued, the current price to earnings ratio of 19.5 times paints a cooler picture. It already sits below the US Hospitality average of 23.4 times and even under our fair ratio estimate of 21.4 times.
In practice, that means the stock is not screamingly cheap so much as reasonably priced for its growth profile, with only a modest rerating needed for upside, but also less of a valuation cushion if execution slips. Is this a calculated entry point or just fair compensation for the risks?
See what the numbers say about this price — find out in our valuation breakdown.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Life Time Group Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 893 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Build Your Own Life Time Group Holdings Narrative
If you see the story differently or want to dig into the numbers yourself, you can build a tailored view in minutes: Do it your way.
A great starting point for your Life Time Group Holdings research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.
Looking for more investment ideas?
Before you move on, you may find it useful to quickly scan a few targeted stock ideas from our powerful Simply Wall Street Screener, tailored to distinct opportunities.
- Explore potential mispricings by reviewing these 893 undervalued stocks based on cash flows that strong cash flow analysis suggests the market has not fully appreciated yet.
- Investigate structural shifts in healthcare by focusing on these 30 healthcare AI stocks that blend medical expertise with cutting edge algorithms.
- Review these 27 quantum computing stocks that are exposed to developments in quantum technology and related infrastructure and security themes.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com