Peloton Q4 Preview: What Analyst Are Expecting With Stock 40% Lower Year-On-Year

Fitness company Peloton Interactive PTON is set to report fourth quarter financial results before the market open Wednesday.

Here’s a look at the earnings estimates, what analysts are saying, and key metrics for investors to watch.

Earnings Estimates: Analysts expect Peloton to report fourth quarter revenue of $639.9 million, according to data from Benzinga Pro.

The company reported revenue of $678.7 million in the fourth quarter of last year.

Peloton has missed revenue estimates from analysts in five of the last seven quarters, with beats in two straight quarters.

Previous guidance from Peloton calls for fourth quarter revenue to be in the range of $630 million to $650 million for the fourth quarter.

Analysts expect the company to report a loss of 38 cents per share in the fourth quarter. The company reported a loss of $1.32 in the fourth quarter of last year.

Peloton has missed analysts’ estimates for earnings per share in each of the last eight straight quarters.

Related Link: Prime Day 2023: Amazon Analysts Estimate Deeper Estimates 

What Analysts Are Saying: After Peloton reported third quarter financial results in May, the company saw several analysts lower price targets for the stock.

In June, Wolfe Research analyst Deepak Mathivanan downgraded Peloton from Peer Perform to Underperform and reiterated a $6 price target.

The analyst said Peloton was a beneficiary of demand during the COVID-19 pandemic, but has since seen demand drop sharply.

Morrissey said other issues outside of demand include a lack of profitability and questionable liquidity going forward.

The analyst was also not convinced in the new strategic initiatives taken by Peloton.

Telsey analyst Dana Telsey reiterated a Market Perform and price target of $10 on Peloton last week.

Key Items to Watch: In the third quarter, Peloton reported a year-over-year drop in total members, but saw its connected fitness subscriptions up year-over-year.

Investors will likely be focusing on key membership figures. Connected fitness subscriptions totaled 3.1 million at the end of the third quarter.

The company’s previous guidance called for fourth quarter connected fitness subscriptions to come in a range of 3.08 million to 3.09 million. Anything lower than that figure could spook investors about the future of the company.

Peloton has been cited by several analysts as a potential winner during Amazon’s Prime Day, with discounts on several products.

It was also reported in July that the fitness company was lowering the price of the Peloton Tread and Peloton Row. Investors would like to see the price cuts leading to increased demand from customers.

It has been over a year since Peloton announced the hiring of former Netflix Inc and Spotify Technology Chief Financial Officer Barry McCarthy as the new CEO.

Investors are eager to see signs of a turnaround for the company that has struggled in recent years.

The company’s most recent announcement was sharing the launch of Peloton for Business, a new B2B fitness and wellness service. Peloton plans to combine offerings with equipment and content and make it available for clients that include gyms, hospitality, corporate wellness, community wellness, multi-family residential, education and healthcare.

The new initiative is expected to be a focal point in Peloton's upcoming earnings, and may dominate analyst inquiries during the company's conference call Q&A session.

PTON Price Action: Peloton shares trade at $7.01 versus a 52-week trading range of $6.62 to $17.83. The stock is down 40% over the last year and has fallen significantly since its pandemic highs.

Peloton shares traded over $150 in January 2021 and spent most of 2021 over the $100 share price level.

The company went public in 2019 at $29 per share.

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Photo: Peloton