On Wednesday, Life Time Group Holdings Inc (NYSE:LTH) shares maintained Market Perform rating and a steady price target of $22.00. The company's preliminary third-quarter results showed a revenue increase of 18.5% year-over-year to $693 million, surpassing the expected $675 million. Adjusted EBITDA also rose by 26% to $180 million, beating the forecast of $169 million. This performance was announced in the context of Life Time's plans to refinance debt that is due in 2026.
Life Time Group reported a 12.1% year-over-year growth in Comparable Center Sales. The company has also achieved its second consecutive quarter of positive free cash flow (FCF) before sale-leaseback transactions. Alongside these financial gains, the company has seen a continuous improvement in its net leverage ratio.
The positive preliminary financial results have come ahead of the full third-quarter report, which is scheduled to be released next Thursday. These figures indicate that Life Time Group is outperforming expectations, which could be a sign of the company's operational strength and its ability to generate cash.
Life Time Group's decision to refinance its 2026 debt appears to align with its improved financial metrics. The company's ability to maintain positive free cash flow and reduce leverage is notable in the context of its refinancing plans.
Investors and stakeholders can expect to receive a more detailed insight into Life Time Group's financials and performance metrics with the full release of the third-quarter results next week. The preliminary announcement has set a positive tone for the upcoming detailed report.
InvestingPro Insights
Life Time Group Holdings Inc's (NYSE:LTH) strong preliminary third-quarter results are further supported by InvestingPro data, which reveals a robust revenue growth of 17.97% over the last twelve months as of Q2 2024. This aligns with the company's reported 18.5% year-over-year revenue increase in Q3. The company's profitability is also highlighted, with an operating income margin of 12.54% for the same period.
InvestingPro Tips indicate that Life Time has shown a "Strong return over the last three months," which is quantified by the impressive 26.67% price total return over the past three months. This performance suggests that the market has been responding positively to the company's improving financials and operational efficiency.
Another relevant InvestingPro Tip notes that the company is "Trading near 52-week high," currently at 96% of its 52-week high price. This reflects investor confidence in Life Time's recent performance and future prospects, including its debt refinancing plans.
For investors seeking a more comprehensive analysis, InvestingPro offers 10 additional tips for Life Time Group Holdings, providing a deeper understanding of the company's financial health and market position.
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