Life Time shares surge on Q4 revenue beat, 2026 guidance
Fitness company reports 226% YoY net income growth as membership demand strengthens
Life Time Group Holdings shares climbed nearly 4% on Thursday after the health and wellness operator reported preliminary fourth-quarter financial results that surpassed analyst expectations, driven by robust membership growth and operational efficiency.
The Chanhassen, Minnesota-based company estimated quarterly revenue of $743 million to $745 million, exceeding the consensus estimate of $736.5 million. The performance represents a 12.2% year-over-year increase and marks the latest milestone in a turnaround year for the premium fitness operator.
More striking was the surge in net income to $120-123 million, a 226.6% increase from the prior-year period. Diluted earnings per share for the quarter came in between $0.52 and $0.54, significantly ahead of the $0.29 analyst consensus.
"Our strong fourth quarter results demonstrate the continued execution of our strategy and the durability of our business model," Life Time said in a company statement. "Comparable center revenue growth of 9.7% to 9.9% reflects the strength of our member base and our ability to attract and retain customers through our comprehensive health and wellness offerings."
For the full fiscal year 2025, Life Time reported total revenue of approximately $2.99 billion to $2.995 billion, up 14.2% from 2024. Net income soared 138.5% to between $371 million and $374 million, while diluted EPS increased 122.3% to $1.63-$1.66. Adjusted EBITDA for the year climbed 21.7% to $823-$825 million.
Looking ahead, the company issued fiscal 2026 revenue guidance of $3.30 billion to $3.33 billion, representing 10.7% growth over 2025 estimates. Life Time projects adjusted EBITDA of $910 million to $925 million, an 11.3% increase, and plans to expand its footprint with 12 to 14 new large-format clubs totaling approximately 1.2 million square feet.
The strong results come at a pivotal moment for Life Time, which trades at $29.01 following Thursday's gains, still below its 52-week high of $34.99 reached earlier in the year. Despite the recent rally, the stock remains well below the consensus analyst target price of $40.27, suggesting room for further upside if the company maintains its growth trajectory.
Analysts have maintained a generally bullish stance on the shares. UBS Group set a $48 price target in October, while Morgan Stanley lowered its objective to $37 in October but maintained an "overweight" rating. Zacks Research downgraded the stock to "hold" in December, a move that now appears conservative given the earnings beat.
The performance reflects broader strength in the premium fitness sector as consumers prioritize health and wellness spending. Life Time's athletic resort format, which combines traditional gym facilities with luxury amenities such as spas, cafes, and co-working spaces, has proven resilient despite economic pressures that have constrained discretionary spending in other areas.
Life Time's comparable center revenue growth of nearly 10% indicates strong same-store sales performance, a key metric in the retail and fitness industries. The company's ability to drive membership renewals and increase average revenue per member has offset inflationary pressures on labor and operational costs.
Investors will have the opportunity to hear more details about Life Time's strategy when the company releases complete fourth-quarter and full-year 2025 results on February 24. Until then, the preliminary figures suggest the company has successfully navigated a challenging economic environment while maintaining its premium positioning in the fitness market.