Critical Analysis: Xponential Fitness (NYSE:XPOF) versus Life Time Group (NYSE:LTH)

Xponential Fitness (NYSE:XPOF) and Life Time Group (NYSE:LTH) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Volatility & Risk

Xponential Fitness has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Life Time Group has a beta of 1.64, meaning that its share price is 64% more volatile than the S&P 500.

Profitability

This table compares Xponential Fitness and Life Time Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xponential Fitness	-10.90%	-2.19%	1.91%
Life Time Group	12.51%	10.20%	3.89%

Analyst Recommendations

This is a summary of recent ratings and price targets for Xponential Fitness and Life Time Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xponential Fitness	2	6	1	0	1.89
Life Time Group	0	2	6	1	2.89

Xponential Fitness currently has a consensus price target of $8.92, indicating a potential upside of 29.70%. Life Time Group has a consensus price target of $40.13, indicating a potential upside of 44.00%. Given Life Time Group’s stronger consensus rating and higher probable upside, analysts plainly believe Life Time Group is more favorable than Xponential Fitness.

Insider & Institutional Ownership

58.6% of Xponential Fitness shares are owned by institutional investors. Comparatively, 79.4% of Life Time Group shares are owned by institutional investors. 42.3% of Xponential Fitness shares are owned by insiders. Comparatively, 13.3% of Life Time Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Xponential Fitness and Life Time Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xponential Fitness	$314.88 million	1.07	-$33.79 million	($1.46)	-4.71
Life Time Group	$3.00 billion	2.06	$373.67 million	$1.66	16.79

Life Time Group has higher revenue and earnings than Xponential Fitness. Xponential Fitness is trading at a lower price-to-earnings ratio than Life Time Group, indicating that it is currently the more affordable of the two stocks.

Summary

Life Time Group beats Xponential Fitness on 14 of the 15 factors compared between the two stocks.

About Xponential Fitness

Xponential Fitness, Inc., through its subsidiaries, operates as a boutique fitness franchisor in North America. It offers pilates, indoor cycling, barre, stretching, rowing, dancing, boxing, running, functional training, and yoga services under the Club Pilates, Pure Barre, CycleBar, StretchLab, Row House, YogaSix, Rumble, AKT, Stride, and BFT brands. Xponential Fitness, Inc. was founded in 2017 and is headquartered in Irvine, California.

About Life Time Group

Life Time Group Holdings, Inc. provides health, fitness, and wellness experiences to a community of individual members in the United States and Canada. It primarily engages in designing, building, and operating of sports and athletic, professional fitness, family recreation, and spa centers in a resort-like environment, principally in suburban and urban locations of metropolitan areas. The company also offers fitness floors with equipment, locker rooms, group fitness studios, indoor and outdoor pools, bistros, indoor and outdoor tennis courts, pickleball courts, basketball courts, LifeSpa, LifeCafe, and childcare and Kids Academy learning spaces. In addition, its Life Time Digital provides live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support, curated award-winning health, and fitness and wellness content. The company is also involved in media activities, conducting athletic events, and provision of related services. It operates various centers, including ground leases. The company was formerly known as LTF Holdings, Inc. and changed its name to Life Time Group Holdings, Inc. in June 21, 2021. Life Time Group Holdings, Inc. was founded in 1992 and is headquartered in Chanhassen, Minnesota.