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Author: Alan LittleDate: 2021-02-08

Peloton (PTON) -6% as delivery delays take shine off Q2 beats

Peloton (PTON) posted fiscal Q2 beats on Friday, but a warning that delivery delays caused by the pandemic could crimp future earnings saw shares close 6% lower on the Nasdaq. 

The exercise equipment manufacturer managed to double the Wall Street consensus with earnings per share of 18 cents, which was way up on the loss reported a year ago.  

Revenue also soared 128% to $1.06bn during the same period to comfortably surpass the pre-report expectations by $300m. 

This was Peloton’s first +$1bn quarter and it was backed up by a 472% spike in paid subscriptions for its at-home fitness service. 

Revenue from subscriptions climbed 152% year over year to $194.7m, now accounting for around a fifth of all revenue, while its total membership increased to 4.4m. 

However, Peloton revealed that it was struggling to keep up with demand for its exercise bikes due to the pandemic. 

The New York-headquartered company noted that “returning our delivery times to pre-pandemic levels” would take time and hit earnings in the near term. 

Peloton expects $1.1bn revenue versus the $1.09bn estimates for fiscal Q3, and $4.08bn sales. 

The warning sent shares into the red after markets opened on Friday, and PTON eventually finished down 5.86% at $148.30. 

Analysts at Cowen are not concerned though after they added $2 to a new $177 price target and reiterated an overweight rating on the strength of Peloton’s sales and subscriber growth. 

KeyBanc analysts also said that the company’s backlog orders were robust despite the delivery delays.  

“A $100 million investment in expedited shipping will put pressure on third-quarter margins, but supply chain commentary is finally favorable,” KeyBanc noted. 





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