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Author: Alan LittleDate: 2020-09-14

Peloton (PTON) shares down 4% despite fiscal Q4 beats

Peloton (PTON) shares closed 4.23% lower on Friday, even though the exercise equipment and media company surpassed earnings estimates and saw its paid digital subscriptions increase threefold during fiscal Q4.

After the bell on Thursday, Peloton posted $0.27 earnings per share for the three-month period ending 20th June, up from a loss of $2.07 per share a year ago.

Total revenues also soared 172% to $607.1m as $485.9m of equipment sales drove record returns and enabled Peloton to deliver its first ever quarterly profit.

A huge increase in paid digital subscriptions (+316,000) also helped as total membership swelled to 3.1m.

Peloton’s exercise bikes and workout routines have been particularly popular since the start of the COVID-19 pandemic, due to gym closures and stay-at-home policies.

CEO John Foley said that the “strong tailwind” it experienced in March will continue to “propel” demand for products into next year.

He added: “Organic demand for our bike remains strong, and member engagement remains elevated despite improving weather and the gradual reopening of the brick and mortar fitness locations.”

Peloton now expects new products to push overall sales to up to $3.65bn in fiscal 2021, a figure that beat forecasts of $2.7bn.

PTON shares rocketed out of the gate on Friday, rising 6% in the first hour of trading.

However, stock reversed tack thereafter and eventually closed at $84.04.

Analyst Jim Cramer said that PTON opened “too hot” and advised investors against buying stock at the current price.

He believes that Peloton would not offer value if the economy suddenly reopened.

Before the decline on Friday, PTON had made gains of 230% for the year to date.

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