Is There Now An Opportunity In Life Time Group Holdings, Inc. (NYSE:LTH)?

Life Time Group Holdings, Inc. (NYSE:LTH), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$22.02 at one point, and dropping to the lows of US$12.12. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Life Time Group Holdings' current trading price of US$12.12 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Life Time Group Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Life Time Group Holdings

Is Life Time Group Holdings Still Cheap?

Great news for investors – Life Time Group Holdings is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $15.70, but it is currently trading at US$12.12 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Life Time Group Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What Kind Of Returns Can We Expect From Life Time Group Holdings In The Future?

Valuation is only one aspect of forming your investment views on Life Time Group Holdings. Another thing to consider is whether it is actually a high-quality company. The best type of investment is always in a great company, producing robust returns at a cheap price. A way to assess stock quality is by looking how much it returns to you as the investor compared to how much you’re invested. Life Time Group Holdings is expected to return 7.2% of your investment in the next couple of years if you buy the stock today. This is a pretty average return, which doesn’t significantly add much to the case for owning the stock.

What This Means For You

Are you a shareholder? Although LTH is currently undervalued, its low future return is a trade-off that investors have to bear in mind. Consider whether you want to increase your portfolio exposure to LTH, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on LTH for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Since it is currently undervalued, now is a great time to make a decision. But keep in mind the low future return, and whether the opportunity cost of investing in LTH versus another stock is worth it.

If you want to dive deeper into Life Time Group Holdings, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Life Time Group Holdings has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Life Time Group Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.