Life Time Group Holdings (LTH) opened Q1 2026 with recent quarterly revenue of US$745.1 million in Q4 2025 and basic EPS of US$0.56, while trailing twelve month EPS sat at US$1.71 as net profit margin reached 12.5% over the last year. Over recent periods the company has seen revenue move from US$663.3 million in Q4 2024 to US$745.1 million in Q4 2025, with trailing twelve month net income rising from US$156.2 million to US$373.7 million, setting the stage for investors to weigh stronger margins against the impact of a one off US$97.7 million gain on the quality of earnings.

See our full analysis for Life Time Group Holdings.

With the latest figures on the table, the next step is to see how these margins and profit trends line up with the widely held narratives about Life Time Group Holdings in the market.

Margins Lifted by 12.5% Net Profit Level

• Over the last 12 months, Life Time Group Holdings generated US$2.99b of revenue and US$373.7 million of net income, resulting in a 12.5% net profit margin compared with 6% the prior year.
• Bulls argue that higher margin services and digital offerings can support this profitability, and the current numbers partly line up with that view:
  • The trailing twelve month basic EPS of US$1.71 sits well above the quarterly run rate in early 2025, where EPS ranged between roughly US$0.33 and US$0.56. This aligns with the bullish idea of multi year earnings growth.
  • At the same time, the data shows a US$97.7 million one off gain included in earnings, so a portion of the 12.5% margin is linked to that. This is important if you are testing the bullish claim that higher profitability is purely operational.

Life Time’s margin story looks strong on the surface, but bulls need to separate ongoing club and wellness profits from the one off gain before leaning on it too heavily for long term expectations. 🐂 Life Time Group Holdings Bull Case

139.2% Earnings Growth Meets Bearish Debt Concerns

• Trailing twelve month earnings grew 139.2% year over year to US$373.7 million, while quarterly net income (excluding extra items) moved from US$37.2 million in Q4 2024 to US$123.0 million in Q4 2025.
• Bears highlight leverage and expansion risk, and the current earnings profile creates a mixed picture for that cautious stance:
  • The five year annualized earnings growth rate of 77% per year and Q4 2025 basic EPS of US$0.56 show that profitability is currently strong. This runs against the idea that high capex and new clubs are already choking earnings.
  • However, the inclusion of a US$97.7 million one off gain in the trailing results means part of the 139.2% earnings growth is not tied to recurring club performance. This supports the bearish concern that headline growth may overstate underlying cash generation.

With a big non recurring gain sitting inside very strong headline growth, skeptics get some support for the view that earnings strength needs to be stress tested against the company’s ongoing expansion and debt load. 🐻 Life Time Group Holdings Bear Case

P/E of 17.5x Versus DCF Fair Value Signal

• At a current share price of US$29.38, Life Time Group Holdings trades on a trailing P/E of 17.5x, below peer average at 24.5x and the US hospitality industry at 20.8x, while the DCF fair value is US$8.61.
• Consensus narrative points to steady growth, but the valuation signals point in two directions that you should weigh side by side:
  • On one hand, the 17.5x P/E sits below the broader US market at 19.1x and below peers. This lines up with the idea that the stock could look relatively inexpensive if analysts’ expectations for revenue growth of around 10.8% and earnings growth to US$448.6 million play out.
  • On the other hand, the DCF fair value of US$8.61 is far below the current share price of US$29.38. This directly challenges the idea that current earnings and a 12.5% margin automatically justify the valuation based only on relative P/E comparisons.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Life Time Group Holdings on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With a mix of strong reported earnings and clear questions around quality and valuation, the picture is not one sided. It is worth checking the underlying numbers, pressure testing your own thesis, and seeing how the balance between opportunity and risk looks to you with the help of the 5 key rewards and 2 important warning signs.

See What Else Is Out There

Life Time Group Holdings shows a strong profit margin on paper, but the large one off gain and DCF value well below the share price raise quality and valuation questions.

If you want stocks where the price tag lines up more closely with fundamentals, it is worth checking companies in the 51 high quality undervalued stocks right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.