Our local gym just hiked prices 10% overnight. Membership costs are now nearly 2x what they were five years ago.
But there’s a limit to how much pricing power a gym can squeeze out of its members.
$Life Time Group Holdings, Inc.(LTH)$ is already seeing membership per center decline consistently for two years. That’s a potential warning sign that higher prices are starting to meet resistance.
If a downturn hits and members begin cutting discretionary spending, the combination of slowing membership and a cost-heavy operating model could turn ugly fast.
At 21x earnings, $LTH looks priced for perfection. The question is how much more pricing power it really has before demand starts to crack.
Markets are always moving - and sometimes, the best move is knowing what works for you.
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