Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Life Time Fitness Shares Sank

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of fitness club operator Life Time Fitness (UNKNOWN: LTM.DL  ) plummeted 21% today after its preliminary fourth-quarter results and outlook disappointed Wall Street.

So what: Life Time shares have risen over the past few months on optimism over a rebound in memberships, but today's preliminary fourth-quarter results -- EPS of $0.53 to $0.56 versus the consensus of $0.65 -- coupled with downbeat guidance for 2013 naturally squashes that hope. In fact, Life Time experienced higher-than-expected membership acquisition costs during the quarter in addition to the lower-than-expected membership growth, forcing analysts to recalibrate their growth expectations considerably.

Now what: Management now expects 2013 EPS of $2.85 to $2.95 on revenue of $1.2 billion to $1.22 billion, below the consensus of $3.17 and $1.24 billion. "The Company's preliminary guidance includes the anticipated impact of the timing of 2013 new center openings, pre-sale expenses for centers opening in early 2014 and the investment in growth initiatives," wrote Life Time in a statement. So while the beaten-down stock might be tempting for short-term traders to pounce on, Life Time's still-shaky financial and competitive position make it a highly questionable long-term opportunity.

Interested in more info on Life Time? Add it to your watchlist.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2231440, ~/Articles/ArticleHandler.aspx, 9/29/2016 6:36:41 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
LTM.DL $0.00 Down +0.00 +0.00%
Life Time Fitness CAPS Rating: *