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!
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Open account Try 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
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