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"We rate LIFE TIME FITNESS INC (LTM) a BUY. This is driven by some important positives, 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, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $56.00 million or 16.13% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.10%.
- LIFE TIME FITNESS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($3.02 versus $2.93).
- 35.58% is the gross profit margin for LIFE TIME FITNESS INC which we consider to be strong. Regardless of LTM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.12% trails the industry average.
- You can view the full analysis from the report here: LTM Ratings Report
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