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.
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.
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紐交所的Life Time Group Holdings股票價格在過去一個月內表現非常出色,取得了27%的優異收益。遺憾的是,過去一個月的收益對過去一年的虧損沒有太大的補救作用,該股仍然下跌了18%。
在價格反彈後,Life Time Group Holdings的市盈率(即 "P/E" )爲44.6倍,與美國市場上大約一半的公司P/E比率低於17倍甚至低於9倍相比,目前看來它是一個強烈的賣出。然而,我們需要更深入地挖掘,以確定高昂的P/E是否有合理的基礎。
在大多數其他公司的盈利出現倒退的時候,Life Time Group Holdings近期的業績表現確實非常出色。P/E可能很高,因爲投資者認爲該公司將繼續比大多數公司更好地應對整個市場的不利因素。你真的希望如此,否則你將爲沒有特定原因而支付高昂的價格。
如果你想看看分析師未來的預測,你應該查看我們關於Life Time Group Holdings的免費報告。
Life Time Group Holdings的增長趨勢如何?
對於預計將提供非常強勁的增長並且重要的是,比市場表現要好的公司而言,Life Time Group Holdings的市盈率可能是典型的。