Peloton (PTON) Shares Up 15% in Pre-market, Sales Surge 66%, More People Buy Bikes Now

UTC by Daria Rud · 3 min read
Peloton (PTON) Shares Up 15% in Pre-market, Sales Surge 66%, More People Buy Bikes Now
Photo: Peloton Blog

Peloton has seen a 66% surge in sales and generated $524.6 million in total revenue for the fiscal third quarter that ended on March 31. $98.2 million came from subscriptions, which is 92% higher year over year, and $420.2 million came from product sales, 61% up. PTON stock is up.

As the coronavirus pandemic led to gyms shutdowns, more people started buying sports equipment and working out at home. One of those who has benefited in these circumstances is Peloton Interactive Inc (NASDAQ: PTON), American exercise equipment and media company. Recently, the company reported its fiscal third-quarter revenue. The sales of Peloton surged by as much as 66%, surpassing analysts’ expectations. Following the news, Peloton (PTON) shares turned out in the green.

Yesterday, Peloton shares opened at $36.83 and rose by 5% by the end of the trading session, closing at $38.03. After hours, PTON stock jumped by another 10.97% to reach $42.20 per share.  Now in the pre-market, PTON is 15% up. It means that the shares price has reached $43.80. The stock has been steadily growing since mid-March, soaring by 95% and reaching the value of $10 billion. Now it is performing much better than at the beginning of 2020, mostly due to quarantine.

Peloton Third Quarter Performace: Surge in Sales amid Coronavirus

As more people started buying sports equipment, Peloton has seen a 66% surge in sales and generated $524.6 million in total revenue for the fiscal third quarter that ended on March 31. $98.2 million came from subscriptions, which is 92% higher year over year, and $420.2 million came from product sales, 61% up.

Peloton wrote in a letter to shareholders:

“Connected Fitness Product revenue exceeded our expectations across all geographies driven by strong demand for our Bike. During the last few weeks of Q3, we saw a significant increase in demand for our bike which has continued into Q4 so far.”

Peloton CEO John Foley said:

“The demand is through the roof. It’s not just people wanting more bikes, but if they have one, they’re using it more.”

But along with the surge in sales, Peloton has seen an increase in its net loss. The loss totaled $55.6 million. In comparison, it was $38.6 million in the year-earlier quarter. The per-share loss narrowed to 20 cents from $1.76. Notably, FactSet analysts were predicting a net loss of 18 cents a share on revenue of $488.5 million for Peloton.

In addition, Peloton saw a surge in its membership. Connected Fitness Subscribers grew 94% to over 886,100, the number of paid Digital Subscribers rose by 64% to over 176,600. The total number of members made up more than 2.6 million. On average, Peloton’s members worked out 18 times a month, which up from 13 in the previous quarter.

Peloton has big expectations for the next quarter and the whole fiscal year. In particular, the company is projecting a gross margin of 42.5% to 43.5%, between 1.04 million and 1.05 million connected fitness subscribers, and at least a double increase in its revenue. Peloton expects its 2020 fiscal-year earnings to be $30 million to $40 million, excluding interest, tax, depreciation, amortization, and other items.

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Daria Rud
Author Daria Rud

Daria is an economic student interested in the development of modern technologies. She is eager to know as much as possible about cryptos as she believes they can change our view on finance and the world in general.

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