Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Life Time (NYSE:LTH) and its peers.
Leisure facilities companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted their spending from "things" to "experiences". Leisure facilities seek to benefit but must innovate to do so because of the industry's high competition and capital intensity.
The 12 leisure facilities stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 4.5% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.5% since the latest earnings results.
Life Time (NYSE:LTH)
With over 150 locations and gyms that include saunas and steam rooms, Life Time (NYSE:LTH) is an upscale fitness club emphasizing holistic well-being and fitness.Life Time reported revenues of $693.2 million, up 18.5% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a decent beat of analysts’ EPS estimates.
The stock is down 12.2% since reporting and currently trades at $22.21.
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Best Q3: Live Nation (NYSE:LYV)
Owner of Ticketmaster and operator of music festival EDC, Live Nation (NYSE:LYV) is a company specializing in live event promotion, venue management, and ticketing services for concerts and shows.Live Nation reported revenues of $7.65 billion, down 6.2% year on year, falling short of analysts’ expectations by 2.1%. However, the business still had a very strong quarter with an impressive beat of analysts’ adjusted operating income estimates.
The market seems happy with the results as the stock is up 7.6% since reporting. It currently trades at $133.32.
Weakest Q3: Dave & Buster's (NASDAQ:PLAY)
Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ:PLAY) operates a chain of arcades providing immersive entertainment experiences.Dave & Buster's reported revenues of $453 million, down 3% year on year, falling short of analysts’ expectations by 2.3%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
Dave & Buster's delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 19.1% since the results and currently trades at $29.79.
Sphere Entertainment (NYSE:SPHR)
Famous for its viral Las Vegas Sphere venue, Sphere Entertainment (NYSE:SPHR) hosts live entertainment events and distributes content across various media platforms.Sphere Entertainment reported revenues of $227.9 million, up 93.1% year on year. This print topped analysts’ expectations by 2.7%. Zooming out, it was a mixed quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates.
Sphere Entertainment delivered the fastest revenue growth among its peers. The stock is down 12.9% since reporting and currently trades at $38.42.
Topgolf Callaway (NYSE:MODG)
Formed between the merger of Callaway and Topgolf, Topgolf Callaway (NYSE:MODG) sells golf equipment and operates technology-driven golf entertainment venues.Topgolf Callaway reported revenues of $1.01 billion, down 2.7% year on year. This result beat analysts’ expectations by 3.2%. More broadly, it was a satisfactory quarter as it also produced a solid beat of analysts’ EPS estimates but EBITDA guidance for next quarter missing analysts’ expectations significantly.
The stock is down 17.5% since reporting and currently trades at $7.79.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
