The popularity of pickleball has skyrocketed in recent years, with more and more people getting involved in this fast-paced sport. Life Time Group Holdings, an upscale fitness and lifestyle company, has emerged as a major beneficiary of this trend. According to Bank of America analyst Alexander Perry, Life Time is poised to capitalize on the increasing popularity of pickleball, which experienced a surge in interest during the Covid lockdown and has continued to attract new players across all skill levels.
Perry’s optimistic outlook on Life Time is reflected in his buy rating on the company, along with a raised price target of $30 per share. This represents a potential 27% increase from the stock’s previous closing price. The stock has already seen a significant 56% increase in value this year, driven by strong second-quarter results and improved financial guidance for the remainder of the year.
Life Time has strategically positioned itself as a leader in the pickleball market, boasting the largest offering of pickleball facilities in the U.S. The company has expanded its number of pickleball courts by 43% and increased pickleball sessions by 71% since the beginning of 2023. With more than 700 permanent courts and pickleball available at 75% of its clubs, Life Time plans to further invest in the sport by expanding to 1,000 courts by the end of 2025.
The emphasis on pickleball has proven to be a smart business move for Life Time, as membership demand continues to surpass club capacity. This excess demand gives the company the flexibility to increase prices and reduce membership turnover, ultimately boosting its bottom line. CEO Bahram Akradi revealed that Life Time has already invested $100 million in pickleball, with the sport contributing up to 7% of the company’s membership dues.
In addition to expanding its facilities, Life Time has developed a specialized pickleball to enhance gameplay. The company also hosts professional tournaments at its clubs for Major League Pickleball and the Professional Pickleball Association, further solidifying its status as a key player in the industry. This commitment to innovation and collaboration underscores Life Time’s dedication to the sport and its growing community of players.
Overall, the success of Life Time Group Holdings in the pickleball market highlights the broader trend of increased interest in this dynamic sport. As pickleball continues to gain momentum, Life Time’s strategic investments and forward-thinking approach position it as a dominant force in the evolving landscape of recreational sports and lifestyle offerings.