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PTON Stock Goes Down in Pre-market, Peloton Reports Disappointing Q4 2021 Earnings

UTC by Steve Muchoki · 2 min read
PTON Stock Goes Down in Pre-market, Peloton Reports Disappointing Q4 2021 Earnings
Photo: Peloton

Peloton reported a net loss of $313.2 million compared to a net income of $89.1 million reported at the same time last year.

Peloton Interactive Inc (NASDAQ: PTON) stock continued with yesterday’s dip during today’s premarket after reporting a rather disappointing fiscal fourth-quarter (Q4) 2021 earnings report. As of August 27, 2021, 7:21 a.m. EDT, PTON stock traded around $104.49, down approximately 8.41%.

According to the company, the fiscal fourth-quarter earnings dramatically dropped due to slow growth and increased cost of running the business.

For the fiscal Q4 2021, Peloton reported revenue of $936.9 million versus an expected revenue of $927.2 million. Additionally, the company reported a loss per share of $1.05 against an expected loss per share of 45 cents according to a survey conducted by Refinitiv.

Notably, Peloton reported a net loss of $313.2 million compared to a net income of $89.1million reported during the same time last year. However, the total revenue during the quarter grew by 54% to $936.9 million from $607.1 million reported at the same time last year.

Compared to last year, Peloton recorded decreased sales during the concluded quarter, mostly due to the ongoing recovery from the coronavirus crisis.

“The past year represented an inflection point for the connected fitness industry, with significant increases in awareness and demand following the onset of the Covid-19 pandemic,” Chief Executive John Foley wrote in a letter to shareholders.

Moreover, the company recalled its treadmill products back in May and temporarily halted sales of the machines. However, the company has scheduled for a comeback for its less expensive treadmill, Tread,  next week.

Peloton Stock and Company’s Performance in Q4 2021

Peloton stock has added approximately 50.2% in the past year but is down around 24.8% year-to-date according to metrics provided by MarketWatch. The dip in the past few months has partially been attributed to the increased competition in the home-based fitness market. Companies such as Hydrow, Tonal, and Lululemon-owned Mirror have shown tremendous growth, particularly during the Covid pandemic.

In a bid to remain competitive in the market, Peloton has opted to slash prices for its less expensive bikes by 20% to $1,495 on Thursday. The cut on the bike prices is expected to take effect in Canada, United Kingdom, Germany, and Australia.

“Competition is rising across connected fitness,” BMO Capital Markets analyst Simeon Siegel said. “Peloton discounting the Bike and upping marketing is a clear signal that the cost to acquire customers is rising after being the only player in the market last year.”

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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."

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