We recently published a list of Stocks On the Rise: 10 Best Stocks to Buy Right Now. In this article, we are going to take a look at where Life Time Group Holdings, Inc. (NYSE:LTH) stands against other best stocks to buy right now.
As per Merrill Lynch, 2025 has not shown much movement. Between the US tariffs and trade wars, geopolitical scenarios, and more, investors continue to be surrounded by attention-grabbing headlines. The firm believes that investors are required to stay focused on numerous key trends that continue to emerge beneath the surface, such as a rebound in the global economic activity, demonstrating signs of a manufacturing recovery. The US continues to be aided by a strong consumer and healthy labor market with double-digit US earnings growth and the unfolding of market rotation. Elsewhere, China has been making efforts to revive its business confidence and consumption. Also, certain parts of Europe have been experiencing expansion mode.
Consolidation in Sector Valuations
Merrill Lynch believes that robust business confidence has been overwhelming tariff and trade worries, with the global economy demonstrating signs of picking up steam instead of slowing down as the consensus has been expecting. This has resulted in the bull run in equities to spread out from the US into other countries that have started to outperform the US. Generally, a synchronized global acceleration remains positive for the earnings outlook and risk assets.
While the growth stocks have been experiencing a sell-off and value stocks continue to appreciate, Morningstar has seen its sector valuations consolidate towards fair value. For instance, the healthcare, real estate, and basic materials were the most undervalued sectors when the year kicked off, but each has now moved closer towards the fair value. Elsewhere, consumer cyclical was overvalued and has experienced a drop to fair value.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Amidst Uncertainties, What Should Be the Strategy?
Morningstar highlighted the current headlines which continue to weigh on investors’ sentiments. From the corporate earnings and guidance, to the tensions related to DeepSeek, including Trump’s tariffs news, there has been significant volatility in the broader markets. Morningstar believes that investors are required to focus on fundamentals, maintain a long-term mindset, and focus on valuations. As per the firm’s valuations, the rotation into value stocks possesses sufficient ability to run. Apart from attractiveness of the value stocks, the rotation into value is expected to yield healthy returns as the broader economy slows and earnings of growth stocks also witness the same momentum.
Our Methodology
To list the Stocks on the Rise: 10 Best Stocks to Buy Right Now, we used a screener to shortlist the stocks that have gained at least 30% YTD, and have a market cap of over $2 billion. We also mentioned the hedge fund sentiments around each stock, as of Q4 2024. Finally, the stocks were arranged in ascending order of their hedge fund sentiments.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A diverse group of people engaging in various activities in a modern fitness center.
Life Time Group Holdings, Inc. (NYSE:LTH)
% Gain on a YTD Basis: ~30.1%
Market cap as on March 6: ~$6.1 billion
Number of Hedge Fund Holders: 36
Life Time Group Holdings, Inc. (NYSE:LTH) offers health, fitness, and wellness experiences to a community of individual members. Analyst John Baumgartner from Mizuho Securities maintained a “Buy” rating on the company’s stock and has a $38.00 price target. The rating was backed by factors highlighting the company’s strong performance and growth potential. Life Time Group Holdings, Inc. (NYSE:LTH) demonstrated healthy results, with Q4 EBITDA and revenue marginally exceeding expectations, reflecting strong operational efficiency and effective management strategies.
In Q4 2024, the company’s revenue rose 18.7% to $663.3 million, thanks to the continued strong growth in membership dues and in-center revenue, fueled by higher average dues, membership growth in its new and ramping centers, and increased member utilization of the in-center offerings. It saw adjusted EBITDA of $177.0 million in Q4 2024, reflecting 28.5% YoY growth. As per the analyst, Life Time Group Holdings, Inc. (NYSE:LTH) has set records in member engagement, retention rates, and revenue per membership, demonstrating its ability to maintain customer loyalty in a competitive market. Furthermore, the strategic reinvestment in programming and enhanced analytics continue to aid Life Time Group Holdings, Inc. (NYSE:LTH)’s growth trajectory, with the expansion of digital capabilities and new revenue streams further cementing its position, says Baumgartner.
White Brook Capital Partners, an investment management firm, released its Q4 2024 investor letter. Here is what the fund said:
“Life Time Group Holdings, Inc. (NYSE:LTH) had a terrific 2024 as the Company became free cash flow positive and operated at a high level, opening new locations and achieving very healthy margins. Here in January, the Company preannounced fourth quarter 2024 results and introduced better than expected 2025 guidance. The stock continues to outperform. Interestingly, in this fourth quarter, the Company achieved its long term leverage ratios ahead of schedule. Given the 25% EBITDA growth expected for 2025 and the capital lightness of its newer ventures, it’s likely there will be a stock buyback or a dividend announced early this year. Lifetime is no longer cheap, but it’s an almost perfect company that is well managed and has a solid future.”
Overall, LTH ranks 5th on our list of best stocks to buy right now. While we acknowledge the potential of LTH as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than LT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.