Value
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.3 |
| P/S | 8.3 |
| EV/EBITDA | 2.3 |
| Fwd P/E | 6.2 |
| PEG | 5.3 |
| Analyst target | 4.0 |
- ▸Forward P/E: 20.9x
- ▸PEG: 1.42
LTH · Why this verdict
Why Life Time Group Holdings (LTH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Three of the last four reported quarters came in above consensus — with the most recent delivering a nearly 10% positive surprise and the prior two averaging roughly 8% — indicating management is consistently executing against operational targets. A golden cross and price above all major moving averages reinforce the constructive near-term backdrop. Earnings | Positive earnings surprises continue for the next two reported quarters, sustaining the three-quarter beat trend. | →Stable |
| CounterThe oldest quarter in the lookback period was a miss, meaning the current streak is three quarters rather than a multi-year record; any return of cost pressure or membership softness could easily interrupt it. | ||
Free cash flow is deeply negative relative to net income — approximately -90% — meaning the business is not converting reported earnings into cash. This gap materially limits confidence in the sustainability of the profitability headline and flags a structural quality concern. Quality breakdown | Free cash flow relative to net income improves above 30% for two consecutive reported quarters, confirming the conversion gap is closing. | →Stable |
| CounterA Piotroski F-Score of 7 out of 9 and strong operating margin components suggest profitability fundamentals are otherwise healthy, indicating the cash flow deficit may reflect near-term capital deployment rather than a structural impairment. | ||
More than 70% of revenue derives from membership dues and enrollment fees, creating significant single-stream concentration; a sustained weakening in membership demand would disproportionately impair the top line with limited revenue diversification to offset it. Bear case | The share of revenue from membership dues and enrollment fees declines below 65% as alternative revenue streams grow to represent a larger proportion of total revenue. | →Stable |
| CounterRecurring membership fees are inherently sticky — high concentration in a predictable subscription-like revenue stream can support revenue visibility if retention rates remain strong. | ||
At current levels, the stock sits just 5.1% below the analyst-derived price target with a reward-to-risk ratio of 0.74 — under one unit of reward per unit of risk — making this an unfavorable entry point for initiating a new position. Price targets | The analyst consensus price target rises above $43 implying upside exceeding 25% from current levels, or a price decline of more than 10% restores a reward-to-risk ratio above 1.5. | →Stable |
| CounterStrong technical momentum — golden cross, price above all major moving averages, RSI near 56 — could carry the stock to and through the analyst target before any pullback materializes, making the current level the lowest available cost basis. | ||
Three of the last four reported quarters came in above consensus — with the most recent delivering a nearly 10% positive surprise and the prior two averaging roughly 8% — indicating management is consistently executing against operational targets. A golden cross and price above all major moving averages reinforce the constructive near-term backdrop.
→StableEarnings
- Expectation
- Positive earnings surprises continue for the next two reported quarters, sustaining the three-quarter beat trend.
CounterThe oldest quarter in the lookback period was a miss, meaning the current streak is three quarters rather than a multi-year record; any return of cost pressure or membership softness could easily interrupt it.
Free cash flow is deeply negative relative to net income — approximately -90% — meaning the business is not converting reported earnings into cash. This gap materially limits confidence in the sustainability of the profitability headline and flags a structural quality concern.
→StableQuality breakdown
- Expectation
- Free cash flow relative to net income improves above 30% for two consecutive reported quarters, confirming the conversion gap is closing.
CounterA Piotroski F-Score of 7 out of 9 and strong operating margin components suggest profitability fundamentals are otherwise healthy, indicating the cash flow deficit may reflect near-term capital deployment rather than a structural impairment.
More than 70% of revenue derives from membership dues and enrollment fees, creating significant single-stream concentration; a sustained weakening in membership demand would disproportionately impair the top line with limited revenue diversification to offset it.
→StableBear case
- Expectation
- The share of revenue from membership dues and enrollment fees declines below 65% as alternative revenue streams grow to represent a larger proportion of total revenue.
CounterRecurring membership fees are inherently sticky — high concentration in a predictable subscription-like revenue stream can support revenue visibility if retention rates remain strong.
At current levels, the stock sits just 5.1% below the analyst-derived price target with a reward-to-risk ratio of 0.74 — under one unit of reward per unit of risk — making this an unfavorable entry point for initiating a new position.
→StablePrice targets
- Expectation
- The analyst consensus price target rises above $43 implying upside exceeding 25% from current levels, or a price decline of more than 10% restores a reward-to-risk ratio above 1.5.
CounterStrong technical momentum — golden cross, price above all major moving averages, RSI near 56 — could carry the stock to and through the analyst target before any pullback materializes, making the current level the lowest available cost basis.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Life Time operates a fitness membership business delivering three of its last four quarters above consensus with a positive technical backdrop, but free cash flow is deeply negative relative to net income, revenue is heavily concentrated in dues and enrollment fees, and with only 5.1% headroom to the analyst target and a reward-to-risk ratio below 1, the current entry point offers insufficient upside relative to the potential drawdown.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.3 |
| ROA | 2.7 |
| Gross margin | 5.6 |
| Op margin | 6.8 |
| Net margin | 6.3 |
| Current ratio | 2.1 |
| FCF quality | 0.0 |
| Moat | 6.1 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -90% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
5.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.4 |
| EPS growth | 4.9 |
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.1 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.7 |
- ▸Overbought (RSI 79)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.6 |
| Price target | 6.0 |
| erm sentiment | 4.9 |
Insider
3.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.2 |
- ▸Heavy insider selling — $1,244,541,540 (13.700% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.2 |
| quality rank | 7.0 |
| growth rank | 5.0 |
- ▸Best-in-class margins
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 1.0 |
| 52w position | 9.5 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 7.0 |
| volatility | 3.9 |
| put call | 5.0 |
| implied vol | 5.9 |
| beta | 5.0 |
| debt equity | 4.4 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.2 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:5.2>=4.5
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:32d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.5=NEGATIVE
- INSIDER:13.70%=EXTREME
Warning (2)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.46
Upside
-7.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.51>1.3
Investment implication
The F-path SELL output reflects an overall score of 4.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 6.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.5=NEGATIVE, INSIDER:13.70%=EXTREME) reinforce the read. Current asymmetry R:R is -0.46 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 6.7, Catalyst at 6.5, and Risk (lower is worse) at 5.5; the weakest are Insider at 3.1, Technical at 4.1, and Quality at 4.6. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -0.46 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Streak Delivery
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Negative Free Cash Flow Quality
Trip ifFree cash flow relative to net income rises above 30% for 2 consecutive reported quarters.
- P3Membership Revenue Concentration Risk
Trip ifRevenue from membership dues and enrollment fees falls below 65% of total revenue for 2 consecutive reporting periods.
- P4Unfavorable Entry Risk Reward
Trip ifAnalyst consensus price target rises above $43 implying more than 25% upside from current price, or price declines more than 10% from current levels.