Peloton stock opens 15% down on Thursday: detailed here

on Nov 3, 2022
  • Peloton Interactive Inc says its loss narrowed in the fiscal first quarter.
  • The connected fitness company disappointed in terms of guidance.
  • Peloton stock is now down about 80% versus its year-to-date high.

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Peloton Interactive Inc (NASDAQ: PTON), on Thursday, reported a year-on-year decline in its quarterly loss. Shares still tanked more than 15% on guidance that came in weaker-than-expected.

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Peloton has been committed to cost cuts

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The fitness equipment manufacturer named Barry McCarthy (former Spotify CFO) its Chief Executive in February of 2022. Ever since, the focus has been on cutting costs. Still, the letter to shareholder reads:

Breakeven FCF is an objective but it’s not a guaranteed outcome. There are risks we’ll underachieve our forecast, particularly in this economic climate. But the green shoots are numerous and undeniable.

In October, Peloton Interactive announced its 4th round of layoffs. It outsourced all manufacturing to Rexon Industrial before that as well that Invezz reported here.

Key takeaways from Peloton’s Q1 results

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  • Lost $409 million versus the year-ago $376 million
  • Per-share loss narrowed a bit from $1.25 to $1.20
  • Revenue slipped 23% year-on-year to $617 million
  • Consensus was 67 cents loss on $637 million in revenue
  • Negative free-cash flow also contracted to $246 million

Adjusted EBITDA loss was $33.4 million (down about 86%) this quarter versus $112 million expected. The connected fitness company added 7,000 new subscribers to end the Q1 with 2.973 million subscribers in total.

Peloton stock slides on weak guidance

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For the current financial quarter, Peloton forecasts up to $725 million in revenue and $110 million to $115 million EBITDA loss (adjusted). In comparisons, analysts had called for $866 million and $108 million, respectively.

Given macroeconomic uncertainties, we believe near-term demand for Connected Fitness hardware is likely to remain challenged.

Including the response to this stock market news, Peloton stock is now trading well below the Street’s lowest price target.


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