Why Life Time Fitness (LTM) Stock Spiked Today

NEW YORK (TheStreet) -- Life Time Fitness (LTM) stock spiked Wednesday after Marcato Capital filed an SEC form disclosing various purchases of common stock and call options since March 24. 

Following the purchases, Marcato Capital holds a 7.2% stake in Life Time Fitness. 

By market close, shares were up 12.1% to $54.30.

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TheStreet Ratings team rates LIFE TIME FITNESS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate LIFE TIME FITNESS INC (LTM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has slightly increased to $77.66 million or 1.87% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -20.46%.
  • LIFE TIME FITNESS INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LIFE TIME FITNESS INC increased its bottom line by earning $2.93 versus $2.68 in the prior year. This year, the market expects an improvement in earnings ($3.09 versus $2.93).
  • The net income growth from the same quarter one year ago has exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 0.8% when compared to the same quarter one year prior, going from $28.10 million to $28.32 million.
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