Peloton tanks 20% on Q3 results: ‘worst-case scenario seems priced in’


Peloton tanks 20% on Q3 results: ‘worst-case scenario seems priced in’

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Wajeeh Khan

May 10, 2022

Peloton reports weak Q3 results and gives disappointing future guidance.

Loop Capital Daniel Adam says the stock could climb to $55 a share.

Shares of the connected fitness company are down 20% this morning.

Peloton Interactive Inc (NASDAQ: PTON) tanked 20% in the stock market this morning on weak third-quarter results and disappointing guidance for the future.

Peloton Interactive Q3 earnings snapshot

Lost $757.1 million in fiscal Q3 versus the year-ago figure of $8.60 million.Per-share loss of $2.27 was significantly above 3 cents it reported last year.Revenue sunk 23% YoY to $964.3 million, as per the earnings press release.FactSet consensus was for 83 cents of per-share loss on $970 million in revenue.Ended Q3 with 2.962 million subscribers, up 42% on a year-over-year basis.

Last week, Peloton was reported in search of potential buyers for a minority stake to shore up business. The stock is now down over 65% for the year.

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Future outlook and analyst’s remarks

For Q4, Peloton forecasts its revenue to fall between $675 million and $700 million on up to $120 million in loss. In comparison, analysts anticipated $820 million in revenue and $19 million of adjusted EBITDA loss.

Despite the let-down, Loop Capital’s Daniel Adam dubs the stock a “buy” with upside to $55 a share. On CNBC’s “Worldwide Exchange”, he said:

At this point, the worst-case scenario seems to be priced in. The most recent leg down is on cash concerns, but we think they have ample cash to survive at least the next few years. PTON will come out a strong, formidable player in a much more consolidated market.

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