Life Time Group: Why Premium Gyms And Their Expansion Pipeline Will Likely Last A Lifetime

Merc Research
30 Followers

Summary

  • Life Time's country club model with comprehensive amenities and an affluent member base creates a defensive moat in the premium fitness market.
  • Elimination of sales staff and promotional pricing has created significant untapped pricing power, with whitespace analysis supporting a revenue uplift opportunity.
  • My Variant View: ancillary revenue streams and strong pricing power drive higher lifetime value per member, extending the EBITDA margin runway beyond consensus expectations.
  • I'm long LTH with a 58% margin of safety, as the market underestimates both expansion acceleration capabilities and margin runway supported by brand strength, premium positioning, and operational discipline.

Group of people with arms raised in yoga position

10'000 Hours

Thesis Overview

Life Time Group Holdings (NYSE:LTH) has seen quite positive performance over the past year, with the Street being slightly bullish on the expansion pipeline. Nonetheless, price targets seem to continue striking low numbers due to competition and concerns

This article was written by

30 Followers
Equity research analyst based in San Francisco. Mainly focused on tech and consumer companies that I have variant points of view on. Always looking to explore interesting business models through a practical, no-nonsense approach.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of LTH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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