Why Life Time Fitness (LTM) Stock Is Lower In Pre-Market Trading Today

NEW YORK (TheStreet) --Shares of Life Time Fitness (LTM) are down -1.87% to $51.02 in pre-market trading this morning following a ratings downgrade to "neutral" from "overweight" at Piper Jaffray (PJC).

The firm said it lowered its rating on the sports recreation and spa centers company based on significant studio competition.

Piper Jaffray cut its price target on Life Time Fitness to $54 from $59.

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Separately, 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 multiple strengths, 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. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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

  • The revenue growth came in higher than the industry average of 6.0%. 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. In addition, LIFE TIME FITNESS INC has also modestly surpassed the industry average cash flow growth rate of -3.26%.
  • 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.
  • You can view the full analysis from the report here: LTM Ratings Report
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