Life Time Group's (LTH) earnings before interest, taxes, depreciation and amortization versus capex spend convergence is appearing closer than previously thought, with the capex spend funding a more accelerated unit growth over the next several years, UBS said in a Thursday research note.

Noting the company's Q2 results, UBS said Life Time Group now sees an EBITDA run rate improvement that is being driven by both underlying member growth improvement, moderate pricing growth, as well as healthy in-center spend.

UBS sees close to $190 million or more in existing footprint EBITDA growth opportunity aided by rack rate working its way through the system over the next 2.5 years to 3 years, according to the note.

UBS said it sees another $140 million to $150 million of EBITDA coming from run rate EBITDA generation from about 13 club openings per year, meaning the path to over $1.3 billion of EBITDA is closer now likely in fiscal 2029 than in fiscal 2030 previously.

UBS maintained its buy rating with a $43 price target on the company's stock.

Price: 45.02, Change: +0.82, Percent Change: +1.86