What Does Life Time’s Falling Multiple Really Say?
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Life Time Group Holdings (LTH) looks like a textbook example of a familiar investing rule: a lower price-to-earnings multiple, what investors pay for each dollar of profit, means a cheaper stock. Life Time’s multiple was 46.4 in mid-2023, and at the latest close it is 21.9. So is Life Time stock cheaper than it was in mid-2023?
Life Time Stock Rose While Its P/E Fell
The shares actually cost more, not less. Life Time stock climbed 107.2% from mid-2023 to the latest close, roughly doubling. The price-to-earnings multiple still fell because profit per share grew even faster, roughly 4.5 times.
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How Much Has Life Time’s Profit Grown?
Life Time generated $415 million in profit over the latest twelve months, compared with $82.9 million in the twelve months to mid-2023. That figure is five times as large, and profit increased in every year in between, as the table shows. The share count also expanded, so profit per share rose less, multiplying about four and a half times from $0.41 to $1.83.
| Twelve months to | Net income | Change in a year | Price-to-earnings |
|---|---|---|---|
| Jun 30, 2021 | -$407 million | not given: no net income figure for the twelve months a year earlier | not given: net income is zero or negative |
| Jun 30, 2022 | -$390 million | not given: net income is zero or negative in one of the two periods | not given: net income is zero or negative |
| Jun 30, 2023 | $82.9 million | not given: net income is zero or negative in one of the two periods | 46.4 |
| Jun 30, 2024 | $109 million | +31.8% | 34.3 |
| Jun 30, 2025 | $227 million | +107.4% | 29.3 |
| Jun 30, 2026 | $415 million | +83% | 21.9 |
| Jun 30, 2026 (at the share price of Oct 21, 2026) | $415 million | +83% | 21.9 |
Net income is the reported total for the twelve months ending on the date shown. Change in a year is that net income against the twelve months before. Each price-to-earnings multiple is the market value at the calendar quarter end paired with those twelve months, over that net income; the last row uses the share price of Oct 21, 2026.
Life Time operates athletic clubs. Management noted on the fiscal Q2 2026 call that revenue expanded on higher dues revenue and strong use of in-center businesses, including double-digit growth in dynamic personal training and Life Spa. Average monthly dues rose about 12.3% from a year earlier while center memberships grew 1.2%. This suggests Life Time is earning more from each member rather than signing up many more of them.
Does A Lower Multiple Make Life Time Cheaper?
Measured by the multiple, the answer is yes: each dollar of profit costs less today, even though each share costs more. The better question asks what investors were paying for when the multiple was high, and how much of it has since materialized. Life Time’s multiple reached 48.8 at the end of March 2023, its first quarter end with positive trailing profit and its highest reading since. Profit at the time was a fraction of current levels, and the company now earns about six and a half times as much. Investors paid the most for each dollar of profit when earnings were far lower, because they expected profit to grow, and it did.
A buyer today does pay less for each dollar of profit than a buyer did in mid-2023. That earlier investor was paying in advance for growth that has since occurred. Valuation multiples typically peak when profit is small and fall as those earnings arrive, so Life Time’s lower multiple serves as a sign of the growth now present in its accounts, not a markdown on the shares.
Where Is Life Time On That Curve Now?
Life Time grew profit quickly over the latest twelve months, helped by a one-time item in late 2025, and management’s guide implies about $170 million of profit in the second half of 2026, against $225 million a year earlier. Profit rose 83.0% in the latest twelve months, following a 107.4% increase in the prior twelve-month period. Profit also grew far faster than sales, which rose 12.7% over the latest twelve months.
The multiple now sits slightly below the 23.0 level of the S&P 500. Management’s guidance points to lower profit: even after raising it in July, the company expects 2026 profit of $358 million to $363 million, below the $415 million of the latest twelve months. On the $361 million midpoint, the multiple would be about 25, above the S&P 500’s 23.0. The next report, expected on October 29, 2026, will show whether profit begins to fall back.
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Life Time earns far more than it used to, and its holders still have to decide what that is worth. When the advisor who built your plan moves on, it is a natural moment to ask whether the plan still fits the life you have now. Our partner advisory firm offers a free review of your holdings, fees and income plan.
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