Peloton Interactive (PTON.US) is one of the worst performing US stocks today. Company's shares are plunging over 20% following release of fiscal-Q4 2023 earnings report (calendar Q2 2023).
Company reported sales that were more or less in-line with market expectations, driven by a 10% jump in subscription revenue. Number of subscribers missed expectations slightly but was almost 4% higher compared to a year ago. Nevertheless, the company continues to struggle to turn profits with adjusted EBITDA coming in at -$34.7 million and adjusted net loss reaching $241.8 million. Gross margin was over 10 percentage points lower than in a year ago quarter!
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appHowever, the biggest disappointment came from the forecast for fiscal-Q1 2024 (calendar Q3 2023). Company expects revenue to come in at $580-600 million - a drop of 3-6% YoY - and adjusted EBITDA to be once again negative. Sales guidance was around 8% lower than market expected while adjusted EBITDA was expected to be positive. On top of that, the company is expecting the number of its Connected Fitness subscribers to be virtually unchanged from a year ago and over 4% lower compared to fiscal-Q4 2023.
Peloton said that cost of recalling faulty equipment substantially exceeded anticipations and seasonal slowdown in hardware sales further added to pressure during April-June 2023 quarter. Company also said that it does not expect to generate positive free cash flow in the next two quarters.
Fiscal-Q4 2023 results
- Revenue: $642.1 million vs $641.6 million expected (-5.4% YoY)
- Connected Fitness: $220.4 million vs $210.2 million expected (-25% YoY)
- Subscription revenue: $421.7 million vs $430.8 million expected (+10% YoY)
- Connected Fitness subscribers: 3.08 million vs 3.09 million expected (+3.8% YoY)
- Adjusted EBITDA: -$34.7 million vs -$19.5 million expected
- EPS: -$0.68 vs -$0.43 expected
- Gross margin: 31.3% vs 41.6% expected
Fiscal-Q1 2024 forecast
- Revenue: $580-600 million vs $647.8 million expected
- Adjusted EBITDA: -$10-20 million vs +$5.7 million expected
- Connected Fitness subscribers: 2.95-2.96 million vs 3.08 million expected
Share price of Peloton Interactive (PTON.US) plunged to a record low today. Stock dropped below the lower limit of a recent short-term trading range and textbook range of the breakout suggests possibility of a drop to as low as $3.80 per share - or around 30% below current market price. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
