Aofex

Peloton (PTON) Stock Down 8% amid Dull Future Outlook and Lower Analysts’ Ratings

UTC by Steve Muchoki · 2 min read
Peloton (PTON) Stock Down 8% amid Dull Future Outlook and Lower Analysts’ Ratings
Photo: Depositphotos

Peloton stock has dropped by approximately 51%, 66%, 54%, 40%, and 42% in the past year, YTD, three months, one month, and five days respectively.

Peloton Interactive Inc (NASDAQ: PTON) stock closed Monday trading at $51.25, down 7.89% from the day’s opening price. The losses extended during the after-hours trading session by approximately 0.88%. The interactive fitness platform with more than 6.2 million members continues to experience challenges presented by the Covid crisis and poor market reception of its products.

The company reported its third-quarter financial year 2021 earnings results last week. Notably, Peloton reported revenue of $1,262.3 million during the third quarter, representing a growth of 141%. Worth noting, the company closed the third quarter with connected fitness subscriptions of 2.08 million, representing a growth of 135%.

Paid Digital Subscriptions grew by 404% to approximately 891,000, whilst the total members in its ecosystem grew to over 5.4 million.

Notably, the company reported a net loss of $8.6 million, or about $0.03 per basic and diluted share.

The company looks good from far but ostensibly far from good according to market analysts. In a note to clients, analyst John Staszak said Peloton is expected to face stiff competition in the coming quarters from other gym chains. Moreover, businesses continue to reopen following almost a two-year closure to adhere to Covid regulations.

“We expect higher costs as the company invests in marketing and new products,” Staszak wrote. “Moreover, higher input prices and increased freight costs should pressure results.”

Notably, the company does not anticipate making any profit whatsoever until the fiscal year 2023. The revelation has seen more investors flee from the company in such of better investments with both short term and long term growth perspectives.

Peloton Stock

According to market analytics provided by MarketWatch, Peloton stock has dropped approximately 51%, 66%, 54%, 40%, and 42% in the past year, YTD, three months, one month, and five days respectively through Monday.

Thereby, its market capitalization has significantly dropped from over $45 billion at the beginning of this year to approximately $16.86 billion as of yesterday.

The company’s stock market has ranged between $49.11 and $171.09  in the past 52 weeks. Currently trading at around $50 indicates a major sell-off in the past year. Additionally, it is an indication most long-term investors have lost hope in the company’s future growth prospects.

Despite earlier recalls of faulty products, some analysts remain positive about the company’s future growth prospects. “Stepping back and looking at the broader picture, however, we believe that the secular growth trends in the home fitness industry remain intact,” Truist Securities analyst Youssef Squali said in a note to clients.

Business News, Market News, News, Stocks, Wall Street
Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

Related Articles