Peloton Stock Is Tumbling. A Disappointing Report Sinks Another Pandemic Play. - Barron's

Peloton stock is down double-digits in after-hours trading after the at-home fitness company reported a big loss and cut guidance.

Courtesy Peloton

Peloton Interactive was the latest pandemic-play stock casualty this earnings season. Shares are diving in extended trading after the at-home fitness firm reported a wider-than-expected net loss for the September quarter, and cut its full fiscal-year outlook.

Peloton reported a fiscal-first-quarter net loss of $376 million, or $1.25 a share. Total revenue grew 6% year over year to $805.2 million. Wall Street’s consensus estimate called for a net loss of $1.10 a share on revenue of $808.7 million, according to FactSet.

The company, which sells bikes and treadmills that pair with $39.99 a month subscriptions, said average monthly workouts per connected fitness subscription dropped to 16.6 from 20.7 a year ago. Investors watch that metric for signs of engagement.

In after-hours trading, Peloton stock is down 25% to $64.59, about a third of its 52-week intraday high of $171.09, set in January. The company joins Roku (ROKU) and Chegg (CHGG) as popular pandemic plays that are now disappointing investors with reports this week.

Peloton now expects the 2022 fiscal year to end in June with 3.35 million to 3.45 million connected fitness subscribers, down from a prior forecast of 3.63 million. Its outlook for fiscal-year revenue ranges from $4.4 billion to $4.8 billion, down from a prior forecast of $5.4 billion.

For the fiscal second quarter, which includes the all-important holiday season, the company expects to hit connected fitness subscribers of between 2.8 million to 2.85 million. It expects revenue in the range from $1.1 billion to $1.2 billion for the quarter, below Wall Street’s consensus estimate of $1.49 billion, according to FactSet. The company said that so far, the fiscal second quarter has been softer than expected.

“With the benefit of adequate inventories and order-to-delivery windows that are now back to pre-pandemic levels, we expect a healthy holiday selling season,” the company added in a prepared statement. “Our forecast assumes unit sales modestly ahead of last year’s Q2 levels, driven by growing consumer interest in the Connected Fitness category and a resumption of our marketing and promotional activity.”

Write to Connor Smith at connor.smith@barrons.com

Adblock test (Why?)

Peloton Stock Is Tumbling. A Disappointing Report Sinks Another Pandemic Play. - Barron's
Read More