Life Time Q2 2026 Results Outperform on All Fronts; Full-Year Guidance Raised

What happened

Life Time reported second-quarter 2026 revenue of $866.0 million, up 13.7% year-over-year, driven by continued strong membership trends and in-center spending. Net income surged 40.6% to $101.4 million, while adjusted EBITDA grew 16.8% to $246.5 million, reflecting operating leverage. Adjusted diluted EPS of $0.48 beat expectations, and management raised its full-year 2026 outlook. The company’s premium positioning and focus on high-value services continue to deliver above-sector growth. With strong free cash flow and disciplined capital allocation, the results reinforce the investment thesis of a high-quality growth compounder in the wellness space.

Implication

The strong Q2 print and guidance raise demonstrate that Life Time’s ARPU-driven model is sustaining momentum, with revenue growth reaccelerating and margins expanding, which should push the stock toward the upper end of our base-to-bull range ($34–$38). However, with the market already pricing in low-teens growth and deleveraging, and the long side increasingly crowded, the risk/reward from current levels is less asymmetric. Investors should monitor comparable-center growth trends and rent obligations in the coming quarters; a pullback toward the $22–$25 level would offer a more attractive entry point, while a break above $34 would call for a reassessment of the thesis.

Thesis delta

While the prior WAIT rating reflected concerns about valuation and execution risk, the Q2 2026 results and raised outlook demonstrate that Life Time’s growth engine is firing on all cylinders. The near-term risk of a slowdown appears diminished, but shares likely price in much of the good news. We maintain a cautious stance, preferring to wait for a pullback before committing new capital, as the upside from current levels is limited and the story is well-known.