With a median price-to-sales (or "P/S") ratio of close to 1.4x in the Hospitality industry in the United States, you could be forgiven for feeling indifferent about Life Time Group Holdings, Inc.'s (NYSE:LTH) P/S ratio of 1.3x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
What Does Life Time Group Holdings' Recent Performance Look Like?
With revenue growth that's inferior to most other companies of late, Life Time Group Holdings has been relatively sluggish. One possibility is that the P/S ratio is moderate because investors think this lacklustre revenue performance will turn around. If not, then existing shareholders may be a little nervous about the viability of the share price.
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' Revenue Growth Trending?
Life Time Group Holdings' P/S ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the industry.
Retrospectively, the last year delivered an exceptional 22% gain to the company's top line. The strong recent performance means it was also able to grow revenue by 134% in total over the last three years. So we can start by confirming that the company has done a great job of growing revenue over that time.
Looking ahead now, revenue is anticipated to climb by 10% each year during the coming three years according to the ten analysts following the company. With the industry predicted to deliver 11% growth per annum, the company is positioned for a comparable revenue result.
With this information, we can see why Life Time Group Holdings is trading at a fairly similar P/S to the industry. It seems most investors are expecting to see average future growth and are only willing to pay a moderate amount for the stock.
The Bottom Line On Life Time Group Holdings' P/S
Using the price-to-sales 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.
A Life Time Group Holdings' P/S seems about right to us given the knowledge that analysts are forecasting a revenue outlook that is similar to the Hospitality industry. Right now shareholders are comfortable with the P/S as they are quite confident future revenue won't throw up any surprises. If all things remain constant, the possibility of a drastic share price movement remains fairly remote.
Before you take the next step, you should know about the 3 warning signs for Life Time Group Holdings (1 is significant!) that we have uncovered.
It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
由於美國酒店業的中位數市銷率(或 “市銷率”)接近1.4倍,你對Life Time Group Holdings, Inc.感到漠不關心是可以原諒的。”s(紐約證券交易所代碼:LTH)市銷率爲1.3倍。但是,不加解釋地忽略市銷率是不明智的,因爲投資者可能會忽視一個明顯的機會或一個代價高昂的錯誤。
Life Time Group Holdings的近期表現如何?
由於最近的收入增長不及大多數其他公司,Life Time Group Holdings一直相對疲軟。一種可能性是市銷率適中,因爲投資者認爲這種乏善可陳的收入表現將扭轉。如果不是,那麼現有股東可能會對股價的可行性有些緊張。
如果你想了解分析師對未來的預測,你應該查看我們關於Life Time Group Holdings的免費報告。
Life Time Group Holdings的收入增長趨勢如何?
Life Time Group Holdings的市銷率對於一家預計僅實現適度增長且重要的是表現與行業持平的公司來說是典型的。