Is Life Time Group Holdings, Inc. overvalued or undervalued?

As of 8 May 2025, the valuation grade for Life Time Group Holdings, Inc. has moved from expensive to attractive, indicating a shift in perception regarding its market value. The company appears to be undervalued, supported by a P/E ratio of 29, which is higher than the peer average of 26.98 for comparable companies like Valvoline, Inc. with a P/E of 17.31. Additionally, Life Time's EV to EBITDA stands at 11.21, which is favorable compared to the industry average, suggesting strong operational efficiency.
In terms of key financial ratios, Life Time Group Holdings boasts a PEG ratio of 0.23, indicating potential growth at a reasonable price, while its ROCE is at 9.95% and ROE at 7.92%. These figures suggest that the company is generating solid returns on its capital and equity. Furthermore, the stock has significantly outperformed the S&P 500 over the past year, with a return of 60.65% compared to the index's 10.26%, reinforcing the notion that the stock may be undervalued relative to its growth potential.