Core Viewpoint - Growth investors are increasingly focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to inherent volatility and risks [1] Group 1: Company Overview - Life Time Group Holdings, Inc. (LTH) is currently recommended as a growth stock by the Zacks Growth Style Score system, which evaluates a company's real growth prospects beyond traditional metrics [2] - The company has a favorable Growth Score and a top Zacks Rank, indicating strong potential for performance [2] Group 2: Earnings Growth - Life Time Group Holdings has a historical EPS growth rate of 165.3%, with projected EPS growth of 55.3% for the current year, significantly surpassing the industry average of 20% [4] - Earnings growth is a critical factor for growth investors, as double-digit growth is often seen as a sign of strong future prospects [3] Group 3: Cash Flow Growth - The company is experiencing a year-over-year cash flow growth of 16.2%, which exceeds the industry average of 11.6%, highlighting its ability to expand without relying heavily on external funding [5] - Over the past 3-5 years, Life Time Group Holdings has maintained an annualized cash flow growth rate of 11.1%, compared to the industry average of 5.7% [6] Group 4: Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Life Time Group Holdings, with the Zacks Consensus Estimate for the current year increasing by 2.9% over the past month [7] - This trend in earnings estimate revisions is correlated with near-term stock price movements, indicating potential for future growth [7] Group 5: Investment Positioning - Life Time Group Holdings holds a Zacks Rank of 2 (Buy) and a Growth Score of B, positioning it well for potential outperformance in the market [9] - The combination of strong earnings growth, cash flow growth, and positive earnings estimate revisions makes it an attractive option for growth investors [9]

Market Overview - Wall Street experienced a rally as the U.S. Senate made progress toward ending the government shutdown, which was crucial for restoring the flow of official data and improving investor sentiment [1][11] - The S&P 500 rose 1.5% to 6,832.43, the Nasdaq Composite surged 2.3% to 23,527.17, and the Dow Jones Industrial Average advanced 0.8% to 47,368.63 [2] Focus on Financially Resilient Stocks - Companies are often evaluated based on sales and earnings, but these metrics alone may not provide a complete picture of financial health [3] - A critical analysis of a company's financial background, particularly the Interest Coverage Ratio, is essential for informed investment decisions [4][7] - The Interest Coverage Ratio indicates a company's ability to pay interest on its debt, with a higher ratio suggesting a stronger financial position [5][8] Interest Coverage Ratio Insights - The Interest Coverage Ratio is calculated as Earnings before Interest & Taxes (EBIT) divided by Interest Expense [5] - A ratio below 1.0 indicates potential default risk, while a higher ratio suggests the company can withstand financial hardships [9] - Companies with strong interest coverage ratios highlighted include Life Time Group Holdings, Inc. (LTH), Cardinal Health, Inc. (CAH), McKesson Corporation (MCK), and Flowserve Corporation (FLS) [11] Company Performance Highlights - Life Time Group has a Zacks Rank of 2, with projected sales growth of 13.7% and EPS growth of 51.6% for the current financial year [16] - Cardinal Health also holds a Zacks Rank of 2, with sales and EPS growth estimates of 15.2% and 18.8%, respectively, and a significant stock increase of 66.3% over the past year [17] - McKesson Corporation, with a Zacks Rank of 2, anticipates sales and EPS growth of 13.8% and 15.6%, but has seen a stock decline of 16.1% in the past year [18] - Flowserve, also ranked 2, projects sales growth of 4.9% and EPS growth of 31.2%, with a stock increase of 15.3% over the past year [19]

Core Insights - Investors in the Leisure and Recreation Services sector may find value in Life Time Group Holdings, Inc. (LTH) and Atour Lifestyle Holdings Limited Sponsored ADR (ATAT) [1] Valuation Metrics - LTH has a forward P/E ratio of 17.44, while ATAT has a forward P/E of 24.16 [5] - LTH's PEG ratio is 0.71, indicating a more favorable valuation compared to ATAT's PEG ratio of 1.25 [5] - LTH's P/B ratio stands at 1.85, significantly lower than ATAT's P/B ratio of 11.71 [6] Investment Grades - Both LTH and ATAT have a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions [3] - LTH holds a Value grade of A, while ATAT has a Value grade of C, suggesting LTH is the superior value option based on current metrics [6]

Core Insights - Life Time is expanding its CTR (Core. Tone. Reform.) program, a high-energy, Pilates-inspired reformer workout, to nearly 30 locations by the end of 2025, with a goal of over 60 locations by the end of 2026 [1][4] - The demand for reformer-based workouts has surged, with participation growing more than 70% since 2022, indicating a strong market trend towards this type of fitness [3] - Life Time's commitment to innovation and member experience is evident in the success of CTR, which has led to waitlists and increased class offerings in clubs where it has launched [4] Company Expansion Plans - CTR has debuted in 10 Life Time athletic country clubs, with 18 additional locations expected to be completed by the end of the year [1] - The program is set to expand to major cities including Atlanta, Chicago, Dallas, and New York City, reflecting a strategic growth initiative [4] - Life Time anticipates doubling the program's footprint in 2026, further enhancing its national presence [4] Member Engagement and Offerings - The introduction of CTR is driving interest in Life Time's broader Pilates offerings, which have been available for nearly 20 years, with over 175 dedicated studios and 800 certified instructors [5] - The Life Time app provides access to a wide range of on-demand and livestream classes, catering to members who may not be near a physical location [6] - Life Time's ecosystem supports healthy living and aging, appealing to a diverse demographic from ages 90 days to 90+ years [7]

Group 1: Stock Performance and Price Targets - Life Time Group Holdings, Inc. (LTH) shares have increased by 0.5% over the past four weeks, closing at $26.18, with a mean price target of $39.23 indicating a potential upside of 49.9% [1] - The average of 13 short-term price targets ranges from a low of $28.00 to a high of $48.00, with a standard deviation of $5.53, suggesting a 7% increase from the current price at the lowest estimate and an 83.4% upside at the highest [2] Group 2: Analyst Consensus and Earnings Estimates - There is strong agreement among analysts regarding LTH's ability to report better earnings than previously predicted, which supports the view of potential upside [4] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 0.1%, with two estimates moving higher and no negative revisions [12] - LTH currently holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Group 3: Caution on Price Targets - Solely relying on consensus price targets for investment decisions may not be wise, as analysts' ability to set unbiased targets has been questioned [3] - Price targets set by analysts often reflect overly optimistic views due to business incentives, which can lead to inflated estimates [8] - While a tight clustering of price targets indicates agreement among analysts, it does not guarantee that the stock will reach the average target [9]

Core Insights - Life Time Group Holdings, Inc. (LTH) is a significant entity in the Leisure and Recreation Services industry, operating health and fitness clubs across the United States [1] Financial Performance - LTH reported an earnings per share (EPS) of $0.45, exceeding the estimated EPS of $0.35, and showing a year-over-year improvement from $0.26 [2][6] - The company achieved revenues of approximately $782.6 million, surpassing the estimated revenue of around $770.7 million, reflecting a 12.9% increase compared to the same quarter last year [3][6] - Net income increased by 147.3% to $102.4 million, while diluted EPS rose by 136.8% to $0.45 [4] - Adjusted net income was $93 million, up 65.2%, and adjusted EBITDA reached $220 million, a 22% increase [4] Market Position and Outlook - LTH has a price-to-earnings (P/E) ratio of approximately 24.05 and a price-to-sales ratio of about 1.94, indicating investor confidence and favorable market value [5] - The company has a solid balance sheet, low leverage, and strong cash generation, positioning it well for continued growth and an improved outlook for 2025 [5]

Financial Data and Key Metrics Changes - Total revenue increased by 12.9% to $783 million [5] - Average monthly dues grew by 10.0% year-over-year to $218 [5] - Net income for the quarter was $102 million, an increase of 147% [5] - Adjusted net income was $93 million, up 65.2% year-over-year [6] - Adjusted EBITDA increased by 22% to $220 million, with a margin improvement of 210 basis points to 28.1% [6][7] - Net cash provided by operating activities rose approximately 66% to $251 million [7] - Free cash flow was $63 million for the third quarter [7] Business Line Data and Key Metrics Changes - Comparable center revenue grew by 10.6%, driven by strong performance in dues and in-center businesses, particularly Dynamic Personal Training [5][10] - Revenue per center membership increased by 11.3% year-over-year [10] - In-center business revenue rose by 14.4% year-over-year, with significant growth in dynamic personal training [10] Market Data and Key Metrics Changes - The company ended the quarter with nearly 841,000 center memberships, with total memberships reaching approximately 891,000 [5] - Average monthly visits per membership reached 12.5, up 5.9% year-over-year [9] Company Strategy and Development Direction - The company aims to accelerate new club growth, with plans to deliver 12-14 new clubs in 2026 and beyond [8][9] - Focus on enhancing member experiences and increasing revenue per center membership through membership optimization [9][10] - The company is expanding its digital offerings and nutritional brand, with plans to release new features for its AI health companion by the end of the year [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and growth strategy, highlighting strong cash flow as a key driver for long-term growth [7][8] - There are no current signs of weakness in consumer demand, with all mature clubs making more money than in the past [41] - The company is prepared for various market conditions and is focused on maintaining a strong balance sheet [43][46] Other Important Information - The company expects to complete between $55 million-$65 million of additional sale-leaseback transactions before the end of the year [7] - Management is considering stock buybacks as a potential capital allocation strategy, but no decision has been made yet [43][46] Q&A Session Summary Question: In-center revenue opportunity and DPT penetration - Management highlighted strong execution in personal training and the potential for further growth in cafes and spas [15][16] Question: Prioritizing club openings beyond 2026 - The company plans to maintain a baseline of 12-14 new clubs annually, with a strong pipeline and successful urban and suburban club performance [18][19] Question: Comparable center revenue guidance and revenue maximization - Management emphasized membership optimization and delivering unmatched brand experiences to maximize revenue without overly relying on membership growth [22][24] Question: Geographic and income cohort weaknesses - Management reported no signs of weakness in consumer demand, with all clubs performing well across various markets [39][41] Question: Capital allocation and stock buybacks - The company is focused on maintaining a strong balance sheet while considering stock buybacks as a future option [43][46] Question: Relative value in the fitness industry - Management noted that Life Time is capturing market share from boutique studios due to its differentiated offerings and high utilization rates [51][52] Question: Life Time Living and Life Time Work contributions - Both initiatives are performing well, with Life Time Living showing superior performance and retention compared to traditional apartment businesses [84][86] Question: New club openings and margin considerations - New larger clubs are expected to have higher average revenue but may initially have negative margins [91][92] Question: Design considerations for new clubs - Management is focused on adapting club designs to meet customer preferences and enhance overall member experience [100]

Financial Data and Key Metrics Changes - Total revenue increased by 12.9% to $783 million [5] - Average monthly dues grew by 10.0% year-over-year to $218 [5] - Net income for the quarter was $102 million, an increase of 147% [5] - Adjusted net income was $93 million, up 65.2% year-over-year [6] - Adjusted EBITDA increased by 22% to $220 million, with a margin improvement of 210 basis points to 28.1% [6][7] - Net cash provided by operating activities rose approximately 66% to $251 million [7] - Free cash flow was $63 million for the third quarter [7] Business Line Data and Key Metrics Changes - Comparable center revenue grew by 10.6%, with guidance raised to between 10.8% and 11.0% for the full year [5] - Revenue per center membership increased by 11.3% year-over-year [10] - In-center business revenue rose by 14.4% year-over-year, particularly in dynamic personal training [10] Market Data and Key Metrics Changes - The company ended the quarter with nearly 841,000 center memberships, reaching approximately 891,000 including on-hold memberships [5] - Average monthly visits per membership reached 12.5, up 5.9% year-over-year [9] Company Strategy and Development Direction - The growth strategy focuses on accelerating new club growth and enhancing member experiences [8] - The company plans to deliver 12-14 new clubs in 2026 and beyond, with 13 clubs currently under construction [9] - Membership optimization is emphasized, aiming to improve the mix with more couples and families while managing qualified memberships [9][10] - The company is excited about the upcoming features of its AI health companion, L•AI•C, and plans to expand its nutritional brand, LTH [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and growth, noting strong execution and member engagement [8][10] - There are no current signs of weakness in consumer demand, with all mature clubs making more money than in the past [41] - The company is prepared for various market conditions, maintaining a strong balance sheet to support growth [43][46] Other Important Information - The company expects to complete between $55 million and $65 million of additional sale-leaseback transactions before the end of the year [7] - The management team is focused on maintaining a strong balance sheet while exploring stock buyback options [43][46] Q&A Session Summary Question: In-center revenue opportunity and DPT penetration - Management highlighted the success of the personal training program and the potential for further growth in cafes and spas [15][16] Question: Prioritizing club openings beyond 2026 - The company plans to maintain a baseline of 12-14 new clubs annually, with a strong pipeline and successful urban and suburban club performance [18][19] Question: Maximizing revenue without increasing membership count - The focus is on brand and member experience, optimizing membership types to increase revenue per membership [24][25] Question: Geographic or income cohort weaknesses - Management reported no signs of weakness, with all clubs performing well across various markets [39][41] Question: Capital allocation and stock buyback considerations - The board is discussing stock buyback options, but the primary focus remains on growth and club development [43][46] Question: Relative value in the fitness industry - The company is seeing increased interest from consumers trading up to Life Time due to its differentiated offerings [51][54] Question: Nutritional brand strategy post-consumer reports investigation - The strategy includes ensuring product quality and safety, with plans for a more aggressive marketing approach in 2026 [56][59] Question: New club openings and market considerations - New clubs are expected to perform similarly in both new and existing markets, with careful planning for wage growth and inflation [63][64] Question: Dynamic Personal Training growth and capacity - Some trainers are fully booked, while others have room for growth, indicating a mixed capacity situation across clubs [71][72] Question: Design considerations for new clubs - The company is adapting designs based on customer preferences and operational efficiency [100]

Financial Data and Key Metrics Changes - Total revenue increased by 12.9% to $783 million, with average monthly dues growing by 10.0% year-over-year to $218 [4] - Net income for the quarter was $102 million, an increase of 147%, benefiting from a $5.7 million tax-affected gain on sale-leasebacks [4] - Adjusted net income rose by 65.2% year-over-year to $93 million, while adjusted EBITDA increased by 22% to $220 million, with an adjusted EBITDA margin improvement of 210 basis points to 28.1% [5] - Net cash provided by operating activities rose approximately 66% to $251 million compared to the prior year quarter [5] Business Line Data and Key Metrics Changes - Comparable center revenue grew by 10.6%, driven by strong performance in dues and in-center businesses, particularly in Dynamic Personal Training [4] - Revenue per center membership increased by 11.3% year-over-year, and in-center business revenue rose by 14.4% year-over-year [9] Market Data and Key Metrics Changes - The company ended the quarter with nearly 841,000 center memberships, with total memberships reaching approximately 891,000, in line with expectations [4] - Average monthly visits per membership reached 12.5, up 5.9% year-over-year, with total visits increasing by 7% year-over-year for the quarter [9] Company Strategy and Development Direction - The growth strategy focuses on accelerating new club growth and enhancing member experiences, aiming to deliver 12-14 new clubs in 2026 and beyond [7] - Membership optimization is emphasized, with strategies to improve the mix of couples and families while limiting qualified memberships in certain clubs [9] - The company is excited about the upcoming release of new features for Lacy, the AI health companion, and plans to expand its nutritional brand, LTH [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and growth, noting that all mature clubs are making more money than in the past [39] - There are no current signs of weakness in the consumer base, with strong performance across various markets [40] - The company is prepared for potential economic challenges, with strategies in place to adapt as necessary [71] Other Important Information - The company expects to complete between $55 million-$65 million of additional sale-leaseback transactions before the end of the year [5] - The average size of new clubs planned for 2026 is approximately 95,000 square feet, compared to 66,000 square feet in 2025 [96] Q&A Session Summary Question: In-center revenue opportunity and DPT penetration - Management highlighted the success of the personal training program and the potential for further growth in in-center revenue, particularly in cafes and spas [12][15] Question: Prioritizing club openings beyond 2026 - The company confirmed a strong pipeline for new clubs, with a focus on urban and suburban locations, and emphasized the importance of maintaining a healthy execution level [17][18] Question: Average member per center growth and revenue optimization - Management discussed the focus on brand and member experience, emphasizing membership optimization to increase revenue per membership without relying heavily on membership unit growth [21][25] Question: Consumer dislocations and geographic performance - Management reported no signs of weakness in consumer behavior, with all clubs performing well across various markets [38][40] Question: Capital allocation and stock buyback considerations - The company is focused on maintaining a strong balance sheet while considering stock buybacks as a potential option, depending on market conditions [41][43] Question: Dynamic Personal Training growth and capacity - Management noted that while some trainers are fully booked, there is still room for growth in Dynamic Personal Training, with ongoing recruitment of new trainers [74][76] Question: Design considerations for new clubs - The company emphasized the importance of flexibility in club design to adapt to changing consumer needs over time [104][105]

Future Club Growth - Life Time Group Holdings预计在2026年开设12-14家俱乐部，2027年开设12-14家以上俱乐部[6,11] - 2026年计划开设的俱乐部主要为大型地面建筑俱乐部[11] - 2026年计划开设的俱乐部总面积超过120万平方英尺，目前在建[11,12] - 2024年开设8家俱乐部，平均每家约85,000平方英尺，总计680,000平方英尺[12] - 2025年开设10家俱乐部，平均每家约66,000平方英尺，总计660,000平方英尺[12] - 2026年预计开设12-14家俱乐部，平均每家约94,000平方英尺，总计超过120万平方英尺[12] Membership & Engagement - 中心会员人数同比增长3.2%[6,40] - 会员参与度持续增长，会员访问量同比增长5.9%，总访问量同比增长7%[6,43] Revenue Growth - Life Time Group Holdings的收入增长算法保持不变，目标增长率为10-12%[6,45]