Stock Analysis & Valuation Life Time Group Holdings, Inc. (LTH)

• Previous Close: $29.17
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	27.93	-4
Intrinsic value (DCF)	11.65	-60
Graham-Dodd Method	10.69	-63
Graham Formula	19.79	-32

Strategic Investment Analysis

Company Overview

Life Time Group Holdings, Inc. (NYSE: LTH) is a leading provider of premium health, fitness, and wellness experiences across the United States and Canada. Operating 151 resort-like centers as of 2021, Life Time offers a comprehensive ecosystem including fitness floors, group studios, pools, tennis courts, spas, and family-friendly amenities like childcare and Kids Academy. The company differentiates itself through its high-end, suburban and urban locations, catering to a membership-driven model that integrates digital offerings like Life Time Digital, which provides live streaming classes, personal training, and wellness content. Life Time also engages in athletic events and media activities, reinforcing its brand as a lifestyle destination. With a focus on holistic wellness, Life Time competes in the $35B+ U.S. fitness industry, targeting affluent consumers seeking an all-inclusive experience. Its capital-intensive model combines owned and leased properties, positioning it as a key player in the premium fitness segment.

Investment Summary

Life Time Group Holdings presents a mixed investment profile. On the positive side, its premium positioning in the growing fitness industry ($35B+ U.S. market) and integrated wellness model (physical + digital) provide revenue diversification. The company generated $2.62B in revenue and $156M net income in its latest fiscal year, with strong operating cash flow of $575M. However, high leverage ($3.99B total debt) and capital expenditures ($524M) reflect its asset-heavy model, increasing financial risk. The stock’s high beta (1.87) suggests volatility, and its lack of dividends may deter income-focused investors. Growth depends on post-pandemic membership retention and expansion into new markets, making it a higher-risk, growth-oriented play in the consumer cyclical sector.

Competitive Analysis

Life Time’s competitive advantage lies in its premium, resort-like facilities that combine fitness, family amenities, and wellness services—a model distinct from budget gyms (e.g., Planet Fitness) or boutique studios. Its integrated digital platform (Life Time Digital) adds stickiness, though it trails pure digital players like Peloton in tech innovation. The company’s scale (151 locations) and owned real estate (63 centers) provide cost control but limit flexibility compared to leased competitors. Key risks include competition from luxury rivals (Equinox) and hybrid fitness trends. Life Time’s differentiation is its ability to monetize members beyond gym access (e.g., spas, cafes), but this requires consistent high-end demand. Its debt load could constrain expansion versus peers with lighter balance sheets.

Major Competitors

• Planet Fitness (PLNT): Planet Fitness dominates the low-cost gym segment with over 2,400 locations. Its $10/month model appeals to price-sensitive consumers, contrasting sharply with Life Time’s premium pricing. However, PLNT lacks amenities like spas or childcare and has weaker digital integration. Its franchise-heavy model reduces capital burdens but limits revenue per location.
• Equinox Holdings (EQX): Equinox competes directly in the luxury fitness space with urban-focused clubs and a strong brand. Its higher membership fees and exclusive partnerships (e.g., SoulCycle) attract affluent clients, but its smaller footprint (~100 locations) and lack of family amenities give Life Time an edge in suburban markets.
• Peloton Interactive (PTON): Peloton’s digital-first approach competes with Life Time Digital, offering immersive at-home fitness. While PTON lacks physical locations, its tech-driven content and hardware ecosystem appeal to convenience-focused users. Post-pandemic demand declines and pricing pressure are key weaknesses versus Life Time’s hybrid model.
• Xponential Fitness (XPOF): Xponential’s boutique studio franchises (e.g., Pure Barre, CycleBar) target niche fitness segments. Its asset-light model enables rapid expansion, but it lacks Life Time’s full-service offerings and recurring membership revenue stability.