Life Time Group Holdings, Inc. (NYSE: LTH)

Sector: Consumer Cyclical Industry: Leisure CIK: 0001869198
Market Cap 6.29 Bn
P/B 2.11
P/E 21.85
P/S 2.16
ROIC (Qtr) 4.59
Div Yield % 0.00
Rev 1y % (Qtr) 12.90
Total Debt (Qtr) 4.13 Bn
Debt/Equity (Qtr) 1.38
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About

Life Time Group Holdings, Inc., often referred to as Life Time, is a prominent player in the health and fitness industry. Its stock is publicly traded on the New York Stock Exchange under the symbol LTH. Life Time has established itself as a leading lifestyle brand, providing premium health, fitness, and wellness experiences to a community of nearly 1.5 million individual members. Life Time's business activities are primarily centered around its health and fitness clubs, which offer a range of amenities and services. These include expansive fitness...

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Investment thesis

Bull case

  • Healthy cash reserves of 241.44M provide 2.36x coverage of short-term debt 102.22M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 793.81M provides strong 12.07x coverage of stock compensation 65.76M, indicating sustainable incentive practices.
  • Strong operating cash flow of 793.81M provides 3.30x coverage of SG&A expenses 240.57M, showing efficient operational cost management.
  • Tangible assets of 6.41B provide exceptional 114.92x coverage of deferred revenue 55.78M, showing strong service capability backing.
  • Operating cash flow of 793.81M provides strong 14.23x coverage of deferred revenue 55.78M, indicating service delivery capability.

Bear case

  • Operating cash flow of 793.81M barely covers its investment activities of (566.72M), with a coverage ratio of -1.40, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of 70.50M provides weak coverage of capital expenditures of 723.30M, with a 0.10 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 473.56M show weak coverage of depreciation charges of 288.61M, with a 1.64 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 70.50M represents just -0.43x of debt issuance (164.60M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Tax assets of 20.16M provide limited offset against tax liabilities of 146.06M, which is 0.14x, indicating potential future cash flow pressure from tax obligations.

Peer comparison

Companies in the Leisure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AS Amer Sports, Inc. 22.38 Bn 71.89 3.67 1.87 Bn
2 HAS Hasbro, Inc. 13.30 Bn 46.47 3.26 3.32 Bn
3 PLNT Planet Fitness, Inc. 7.78 Bn 37.79 6.04 2.58 Bn
4 GOLF Acushnet Holdings Corp. 7.40 Bn 80.24 4.75 0.90 Bn
5 LTH Life Time Group Holdings, Inc. 6.29 Bn 21.85 2.16 4.13 Bn
6 MAT Mattel Inc /De/ 5.43 Bn 12.57 1.04 2.59 Bn
7 YETI YETI Holdings, Inc. 3.97 Bn 24.75 2.17 0.22 Bn
8 MSGE Madison Square Garden Entertainment Corp. 2.95 Bn 56.80 2.91 1.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.30 1.19
EV to Cash from Ops. EV/CFO 12.82 -6.09
EV to Debt EV to Debt 2.47 14.49
EV to EBIT EV/EBIT 21.49 -159.90
EV to EBITDA EV/EBITDA 13.99 -4.06
EV to Free Cash Flow [EV/FCF] EV/FCF 144.37 0.74
EV to Market Cap EV to Market Cap 1.62 -0.64
EV to Revenue EV/Rev 3.49 4.65
Price to Book Value [P/B] P/B 2.11 4.75
Price to Earnings [P/E] P/E 21.85 12.00
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.51
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.11
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.13
Interest Coverage Int. cover (Qtr) 4.63 -30.68
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -33.78 -13.50
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 76.16 1,190.33
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 13.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 43.31 -111.75
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 21.51 -165.31
EBIT Growth (1y) % EBIT 1y % (Qtr) 44.00 -1,562.20
EBT Growth (1y) % EBT 1y % (Qtr) 102.59 -1,555.34
EPS Growth (1y) % EPS 1y % (Qtr) 84.72 -377.44
FCF Growth (1y) % FCF 1y % (Qtr) 1,992.14 10.93
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 18.97 17.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.37 0.73
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 0.39 3.31
Current Ratio Curr Ratio (Qtr) 0.67 4.80
Debt to Equity Ratio Debt/Equity (Qtr) 1.38 2.35
Interest Cover Ratio Int Coverage (Qtr) 4.63 -30.68
Times Interest Earned Times Interest Earned (Qtr) 4.63 -30.68
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 26.20 -57.55
EBIT Margin % EBIT Margin % (Qtr) 16.25 -65.38
EBT Margin % EBT Margin % (Qtr) 12.74 -69.55
Gross Margin % Gross Margin % (Qtr) 36.00 46.51
Net Profit Margin % Net Margin % (Qtr) 9.90 -74.45