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Life Time Group Holdings (LTH) Risk Analysis
Risk Overview Q2, 2026
Source: the company's latest filing for the period ended Jun 30, 2026, filed Jul 30, 2026
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1We are a "controlled company" within the meaning of the NYSE rules and the rules of the SEC. As a result, we qualify for and are currently relying on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies.
As a result of the Voting Group owning a majority of our common stock, we are a "controlled company" within the meaning of the corporate governance standards of the NYSE and the rules of the SEC. Under these rules, a "controlled company" may elect not to comply with certain corporate governance requirements, including: - the requirement that a majority of our board of directors consist of "independent directors" as defined under the rules of the NYSE;- the requirement that we have a compensation committee that is composed entirely of directors who meet the NYSE independence standards for compensation committee members with a written charter addressing the committee's purpose and responsibilities;- the requirement that our director nominations be made, or recommended to our full board of directors, by our independent directors or by a nominations committee that consists entirely of independent directors and that we adopt a written charter or board resolution addressing the nominations process; and - the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees. We do not currently have a nominating and corporate governance committee or compensation committee that consists entirely of independent directors. We may also elect to rely on additional exemptions for so long as we remain a "controlled company." As a result, in the future our board of directors and those committees may have more directors who do not meet the NYSE's independence standards than they would if those standards were to apply. The independence standards are intended to ensure that directors who meet those standards are free of any conflicting interest that could influence their actions as directors. Accordingly, stockholders may not have the same protections afforded to stockholders of other companies that are subject to all of the corporate governance requirements of the NYSE.
- Accounting & Financial Operations - Risk 2Our ability to use our net operating loss carryforwards and certain other tax attributes may become subject to limitation.
As of December 31, 2024, we had U.S. federal and state net operating loss carryforwards of approximately $170.7 million ($35.9 million tax effected) and $155.5 million ($8.8 million tax effected), respectively, and disallowed interest expense carryforwards under Section 163(j) of the Internal Revenue Code of 1986, as amended (the "Code"), of approximately $264.2 million ($66.3 million tax effected). Our ability to utilize our federal net operating carryforwards and disallowed interest expense carryforwards (the "Tax Attributes") may become limited under Section 382 of the Code. The limitation applies if we experience an "ownership change," which is generally defined as a greater than 50 percentage point change (by value) in the ownership of our equity by certain stockholders over a rolling three-year period. The amount of the annual limitation is generally equal to the product of the applicable long-term tax exempt-rate (as published by the Internal Revenue Service for the month in which the "ownership change" occurred) and the value of our outstanding stock immediately prior to the "ownership change." If we have a net unrealized built-in gain in our assets immediately prior to the "ownership change," the annual limitation may be increased as certain gains are, or are treated as, recognized during the five-year period beginning on the date of the "ownership change." Similar provisions of state tax law may also apply to limit the use of our state net operating loss carryforwards. We may undergo an "ownership change" due to future transactions in our stock, which may be outside of our control, and we cannot predict whether any future "ownership change" would result in a significant limitation on our ability to use our Tax Attributes to offset our taxable income and adversely affect our future cash flows.
- Debt & Financing - Risk 3Rates under our senior secured credit facility are variable, which has and could result in increased debt service obligations and decreased net income and cash flows.
Borrowings under the revolving portion of our senior secured credit facility (the "Revolving Credit Facility") and the term loan portion of our senior secured credit facility (the "Term Loan Facility" and, together with the Revolving Credit Facility, the "Credit Facilities") are at variable rates of interest and expose us to interest rate risk. If interest rates increase, as they have in the past, our debt service obligations on the variable rate indebtedness increases even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, correspondingly decreases. Assuming no prepayments of the Term Loan Facility and that the Revolving Credit Facility is fully drawn, each one percentage point change in interest rates would result in an approximately $16.5 million change in annual interest expense on the indebtedness under the Credit Facilities. In the future, we may enter into interest rate swaps or hedging agreements that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility or risk. However, we may not maintain interest rate swaps or hedge agreements with respect to any of our variable rate indebtedness, and any such transaction we enter into may not fully or effectively mitigate our interest rate risk. Changes in market interest rates may influence our financing costs, returns on financial investments and the valuation of derivative contracts and could reduce our earnings and cash flows.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 30
- Share Price & Shareholder Rights - Risk 1Non-U.S. holders who own more than 5% of our common stock may be subject to U.S. federal income tax on gain realized on the sale or other taxable disposition of such stock.
Because we have significant ownership of real property located in the United States, we may be a "United States real property holding corporation" ("USRPHC") for U.S. federal income tax purposes, but we have made no determination to that effect. There can be no assurance that we do not currently constitute or will not become a USRPHC. As a result, any beneficial owner of our common stock that is neither a "U.S. person" nor an entity treated as a partnership for U.S. federal income tax purposes (a "Non-U.S. Holder") may be subject to U.S. federal income tax on gain realized on a sale or other taxable disposition of our common stock if such Non-U.S. Holder has owned, actually or constructively, more than 5% of our common stock at any time during the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder's holding period in such stock.
- Share Price & Shareholder Rights - Risk 2Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws, as well as provisions of the Delaware General Corporation Law (the "DGCL"), could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions include: - establishing a classified board of directors such that not all members of the board are elected at one time;- allowing the total number of directors to be determined exclusively (subject to the rights of holders of any series of preferred stock to elect additional directors) by resolution of our board of directors and granting to our board the sole power (subject to the rights of holders of any series of preferred stock or rights granted pursuant to the Stockholders Agreement) to fill any vacancy on the board;- limiting the ability of stockholders to remove directors without cause;- authorizing the issuance of "blank check" preferred stock by our board of directors, without further stockholder approval, to thwart a takeover attempt;- prohibiting stockholder action by written consent (and, thus, requiring that all stockholder actions be taken at a meeting of our stockholders);- eliminating the ability of stockholders to call a special meeting of stockholders;- establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at annual stockholder meetings;- requiring the approval of the holders of at least two-thirds of the voting power of all outstanding stock entitled to vote thereon, voting together as a single class, to amend or repeal our amended and restated certificate of incorporation or amended and restated bylaws; and - electing not to be governed by Section 203 of the DGCL. These provisions could discourage, delay or prevent a transaction involving a change in control of our Company. They could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and cause us to take corporate actions other than those which our stockholders desire.
- Share Price & Shareholder Rights - Risk 3Transactions undertaken in connection with the repurchase of our common stock may not occur, and if they do, may not realize the anticipated long-term stockholder value and could have adverse tax effects on us.
In February 2026, our board of directors authorized a share repurchase program for the repurchase of up to $500 million of our common stock, as detailed in "Part II-Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities-Purchases of Equity Securities." Our share repurchase program does not obligate us to repurchase any specific number of shares of common stock, has no expiration date and may be modified, terminated or suspended at any time without prior notice. The timing and amount of repurchases, if any, will be subject to our liquidity, leverage ratio, stock price, business and market conditions, and compliance with applicable legal and contractual obligations. Additionally, repurchases of our common stock could reduce our cash reserves, which may impact our ability to finance our growth and strategic acquisitions or opportunities. Repurchases of our common stock, or any decision to not utilize the full authorized amount, could affect the trading price of our common stock and could increase volatility. Although share repurchase programs are intended to enhance long-term stockholder value, there is no assurance that our program will do so. Additionally, the Inflation Reduction Act of 2022 (the "Inflation Reduction Act") imposed a 1% excise tax on the fair market value of stock on certain repurchases (including redemptions) of stock by publicly traded corporations on or after January 1, 2023, subject to certain exceptions (including an exception that allows netting the amount of stock redemptions or repurchases against certain new issuances of stock). Subsequently, the U.S. Department of the Treasury issued final regulations providing additional rules about this excise tax. If we redeem or repurchase shares of our common stock in connection with the share repurchase program that we have announced, we could be subject to this excise tax unless we qualify for any of the exceptions that are provided in the Inflation Reduction Act, in the final regulations, or in other laws, regulations or rules. Any such excise tax would be our liability and could increase the amount of tax that we are required to pay.
- Share Price & Shareholder Rights - Risk 4The Voting Group owns a significant amount of our common stock and their interests may not be aligned with yours. We ceased being a "controlled company" within the meaning of the NYSE rules and the rules of the SEC in June 2025.
As long as the Voting Group continues to own a significant amount of our total outstanding shares of common stock, they will be able to strongly influence the outcome of corporate actions. It is possible that members of the Voting Group may have interests that are different from other stockholders and may vote in a way with which other stockholders may disagree and that may be adverse to other stockholders' interests. Further, members of the Voting Group may have differing views from each other, none of which may align with other stockholders' interests. In addition, the Voting Group's concentration of ownership could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which could cause the market price of our common stock to decline or prevent our stockholders from realizing a premium over the market price for their common stock. Additionally, certain of the members of the Voting Group are in the business of making investments in companies and may from time to time acquire interests in businesses that directly or indirectly compete with certain portions of our business or supply us with goods and services. Such members of the Voting Group may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us or may be more expensive for us to pursue. We ceased to be a "controlled company" within the meaning of the corporate governance standards of the NYSE and the rules of the SEC effective as of June 5, 2025. Within one year of that date, we are required to have a nominating and corporate governance committee and compensation committee that consist entirely of independent directors. The independence standards are intended to ensure that directors who meet those standards are free of any conflicting interest that could influence their actions as directors. Accordingly, stockholders may not have the same protections afforded to stockholders of other companies that are subject to all of the corporate governance requirements of the NYSE until we meet such requirements during 2026.
- Share Price & Shareholder Rights - Risk 5Future sales, or the perception of future sales, by us or our existing stockholders in the public market could cause the market price for our common stock to decline.
The sale of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. As of December 31, 2025, we had a total of 221,076,666 shares of common stock outstanding and the Voting Group held approximately 38.3% of such shares (down from 62.7% as of December 31, 2024). The Voting Group includes investment funds affiliated with Leonard Green & Partners, L.P. and its affiliates ("LGP") and TPG Inc. and its affiliates ("TPG"), which collectively held approximately 19.3% of our common stock as of December 31, 2025 (down from 42.5% as of December 31, 2024). Most of the shares of our common stock held by the Voting Group are "restricted securities" under Rule 144 of the Securities Act and subject to certain restrictions on resale. Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144. The Voting Group has certain registration rights under the amended and restated stockholders agreement with the Company (the "Stockholders Agreement"). Registration of any of these outstanding shares of common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement. We currently have an automatic shelf registration statement on Form S-3 filed with the SEC under which we or the Voting Group could elect to register shares of our common stock as was done in 2024 and 2025. If the Voting Group exercises its registration rights again, sells a significant number of shares pursuant to an exemption from registration or is perceived by the market as intending to sell them, the market price of our common stock could drop significantly. These factors could also make it more difficult for us to raise additional funds through future offerings of our common stock or other securities. In addition, our shares of common stock subject to outstanding awards or reserved for future issuance under our 2015 Equity Incentive Plan, 2021 Incentive Award Plan and our 2021 Employee Stock Purchase Plan will become eligible for sale in the public market once those shares are issued, subject to provisions relating to any vesting agreements. We may also issue our securities in connection with investments or acquisitions. The amount of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to our stockholders and the securities issued may have rights that are senior to our common stock.
- Share Price & Shareholder Rights - Risk 6Our share price has and may change significantly, and stockholders may not be able to resell our common stock at or above the price per share paid or at all.
The trading price of our common stock has experienced volatility. Stock volatility often has been unrelated or disproportionate to the operating performance of particular companies. Additionally, how active and liquid the trading market on the NYSE for our common stock may be impacted by the fact that certain of our existing stockholders who were stockholders before the IPO, who we refer to as the "Voting Group," collectively held as of December 31, 2025, approximately 38.3% of the voting power of our common stock (down from 62.7% as of December 31, 2024). Stockholders may not be able to resell our common stock at or above the price per share paid due to a number of factors, such as the amount of liquidity in the market for our shares, those listed in other portions of this "Risk Factors" section and the following: - results of operations that vary from the expectations of securities analysts and investors or from our competitors;- if securities analysts do not publish research or reports about our business, or if they downgrade our common stock or our industry;- changes in expectations as to our future financial performance and growth, including financial estimates and investment recommendations by securities analysts and investors;- investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives;- the public's response to press releases or other public announcements by us or third parties, including our filings with the SEC;- guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; and - changes in accounting principles. These broad market and industry fluctuations may materially adversely affect the market price of our common stock, regardless of our actual operating performance. In the past, following periods of market volatility, stockholders of companies have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
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