Peloton stuns Wall Street with unexpected revenue growth

VaselineAugust 22, 2024

0 2 minutes read

Peloton stuns Wall Street with unexpected revenue growth

Peloton Interactive Shares ( PTON ) are trading significantly higher in Thursday’s session after the connected fitness company beat top and bottom expectations for its fiscal fourth quarter.

In the three months ended June 30, Peloton’s revenue rose 0.2% year over year to $644 million, marking the first annual increase in revenue since the second quarter of fiscal 2022. Net loss per share of of the company was reduced to 8 cents from 68 cents. during the previous year.

“We ended fiscal 2024 with a strong performance in the fourth quarter, meeting or exceeding our guidance on all key metrics and making continued progress on a number of financial goals,” Peloton said. “With a stable financial foundation now in place, we can focus on innovation in a more strategic way, improving our members’ experience and driving long-term sustainable and profitable growth.”

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The company’s results easily beat analysts’ expectations. Wall Street had expected revenue of $631 million and a net loss of 17 cents, according to CNBC.

Here’s what Peloton expects to achieve in the first quarter and full year of fiscal 2025:

Swipe to scroll horizontally

Metric	Q1 2025	FY 2025
Income	$560 million to $580 million	$2.4 billion to $2.5 billion
Adjusted EBITDA	$50 million to $60 million	$200 million to $250 million

For PTON’s fiscal 2025 first quarter, analysts anticipate revenue of $609 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $45 million. While the company’s revenue forecast is below Street expectations, its higher EBITDA outlook reflects a focus on long-term profitable growth.

For the full year, analysts are calling for revenue of $2.7 billion.

Is Peloton stock a buy, sell or hold?

Peloton has been putting Wall Street to work since the peak of the pandemic. This year alone, the stock is down nearly 29% — including Thursday’s post-earnings rally. Not surprisingly, Wall Street is on edge when it comes to consumer discretionary stock.

Conformable S&P Global Market Intelligencethe analyst consensus price target for PTON stock is $4.75, representing an implied upside of over 14% from current levels. Meanwhile, the consensus recommendation is a hold.

Financial services firm UBS Global Research is even more bearish on the stock, with a sell rating and a $2.50 price target.

“We believe a steady momentum in positive growth in total interactive visits could signal an increase in demand, but we are also wary of seasonal promotional activity that could temporarily affect these figures over shorter periods,” wrote UBS analyst Arpine Kocharyan in a note dated August 13. “We believe investors remain focused on connected fitness subscription growth in 2025, especially as it becomes apparent that the app’s tiered membership approach and relaunched app have not driven the conversion to connected fitness that many expected.”

VaselineAugust 22, 2024

0 2 minutes read

Vaseline

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