Life Time’s Pickleball Stock Jumps: Right now, pickleball is not just a sport; it’s big business. According to Bank of America (BoA), investing in Life Time Group Holdings (“Life Time”) might be as wise as upgrading to a new paddle. The explosive rise in pickleball has made Life Time a major player in the sector, and BoA analyst Alexander Perry is bullish on the company’s prospects.
Life Time’s Pickleball Strategy
Life Time Group Holdings has embraced pickleball with a strategy that positions it as the leading provider of indoor courts in the U.S. The company has:
- Increased its number of pickleball courts by 43% since Q1 2023.
- Expanded pickleball sessions by 71% in the same timeframe.
- Installed over 700 permanent pickleball courts across its facilities.
- Offered pickleball at 75% of its clubs.
- Set an ambitious goal to expand to 1,000 courts by the end of 2025.
Financial Impact and Analyst Outlook
Bank of America analyst Alexander Perry has reaffirmed his buy rating on Life Time’s stock, raising the price target to $30—a potential increase of 27%. Life Time’s stock has surged more than 56% this year, driven by its robust Q2 results and upward revision of its financial outlook. Pickleball has become a significant revenue driver, contributing up to 7% of Life Time’s membership dues.
Pickleball’s Growth
The sport of pickleball is experiencing unprecedented growth, with the number of players in the U.S. increasing by 53% to 13.6 million in 2023. As the fastest-growing sport in the country, pickleball’s popularity shows no signs of slowing.
Additional Initiatives
Life Time has committed up to $100 million to bolster its pickleball offerings. This includes creating a specialized ball for the sport and hosting professional tournaments for Major League Pickleball and the Professional Pickleball Association. Analyst Perry believes Life Time is uniquely positioned among leisure companies to capitalize on pickleball’s growing appeal, thanks to strong membership demand and potential for further price increases.
Pickleball’s Impact on Life Time’s Revenue
Life Time’s investment in pickleball is paying off handsomely:
- Pickleball contributes between 6-7% of the company’s total membership dues.
- The company reported a 17.97% revenue increase year-over-year as of Q2 2024.
- Life Time’s expansion includes growing the number of pickleball courts and sessions, with plans to reach 1,000 courts by the end of 2025.
- Approximately 26% of Life Time’s clubs are operating with waitlists, reflecting high demand and the potential for increased membership prices.
By tapping into the pickleball trend, Life Time has not only boosted its revenue directly from the sport but also enhanced overall membership attraction and retention, strengthening its market position in the fitness industry.
News in Brief: Life Time’s Pickleball Stock Jumps
Life Time Group Holdings’ stock has soared 56% this year, fueled by the booming popularity of pickleball. Bank of America analyst Alexander Perry has raised the price target to $30, citing significant revenue contributions from pickleball, which has driven strong membership growth. Life Time has increased its pickleball courts by 43% and plans to reach 1,000 courts by 2025. The sport has become a key revenue driver, contributing up to 7% of membership dues and leading to a 17.97% increase in revenue over the past year.
ALSO READ : Life Time Fall Classic Pickleball Tournament 2024: The Must-Attend Tournament for Pickleball Enthusiasts
