The Life Time Group Holdings, Inc. (NYSE:LTH) share price has done very well over the last month, posting an excellent gain of 27%. Unfortunately, the gains of the last month did little to right the losses of the last year with the stock still down 18% over that time.
Following the firm bounce in price, Life Time Group Holdings' price-to-earnings (or "P/E") ratio of 44.6x might make it look like a strong sell right now compared to the market in the United States, where around half of the companies have P/E ratios below 17x and even P/E's below 9x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
Life Time Group Holdings certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. The P/E is probably high because investors think the company will continue to navigate the broader market headwinds better than most. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
NYSE:LTH Price to Earnings Ratio vs Industry May 31st 2024 If you'd like to see what analysts are forecasting going forward, you should check out our free report on Life Time Group Holdings.
How Is Life Time Group Holdings' Growth Trending?
Life Time Group Holdings' P/E ratio would be typical for a company that's expected to deliver very strong growth, and importantly, perform much better than the market.
Retrospectively, the last year delivered a decent 14% gain to the company's bottom line. However, due to its less than impressive performance prior to this period, EPS growth is practically non-existent over the last three years overall. Therefore, it's fair to say that earnings growth has been inconsistent recently for the company.
Turning to the outlook, the next three years should generate growth of 36% each year as estimated by the eleven analysts watching the company. With the market only predicted to deliver 9.9% per annum, the company is positioned for a stronger earnings result.
In light of this, it's understandable that Life Time Group Holdings' P/E sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
What We Can Learn From Life Time Group Holdings' P/E?
Life Time Group Holdings' P/E is flying high just like its stock has during the last month. Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
As we suspected, our examination of Life Time Group Holdings' analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. Right now shareholders are comfortable with the P/E as they are quite confident future earnings aren't under threat. It's hard to see the share price falling strongly in the near future under these circumstances.
You need to take note of risks, for example - Life Time Group Holdings has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.
Of course, you might also be able to find a better stock than Life Time Group Holdings. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
纽交所的Life Time Group Holdings股票价格在过去一个月内表现非常出色,取得了27%的优异收益。遗憾的是,过去一个月的收益对过去一年的亏损没有太大的补救作用,该股仍然下跌了18%。
在价格反弹后,Life Time Group Holdings的市盈率(即 "P/E" )为44.6倍,与美国市场上大约一半的公司P/E比率低于17倍甚至低于9倍相比,目前看来它是一个强烈的卖出。然而,我们需要更深入地挖掘,以确定高昂的P/E是否有合理的基础。
在大多数其他公司的盈利出现倒退的时候,Life Time Group Holdings近期的业绩表现确实非常出色。P/E可能很高,因为投资者认为该公司将继续比大多数公司更好地应对整个市场的不利因素。你真的希望如此,否则你将为没有特定原因而支付高昂的价格。
纽交所:LTH股票价格收益率与行业板块相比(截至2024年5月31日)如果你想看看分析师未来的预测,你应该查看我们关于Life Time Group Holdings的免费报告。
Life Time Group Holdings的增长趋势如何?
对于预计将提供非常强劲的增长并且重要的是,比市场表现要好的公司而言,Life Time Group Holdings的市盈率可能是典型的。