DKS - Peloton (PTON) Stock Trades Higher on Stabilizing Revenue and Memberships
2024-02-01 08:07:43 ET
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Shares of New York City-based Peloton Interactive (NASDAQ: PTON ) rose 2% on Thursday after announcing better-than-expected revenue and stabilizing subscription figures. The fitness company posted revenue of $743.6 million for the quarter, beating Wall Street estimates of $733.49 million by 1.4%. Losses per share of 54 cents came within a penny of expectations and marked a significant improvement over its 98-cents-per-share loss in the prior year. Paid connected fitness subscriptions edged up 1%.
Peloton’s shares have been volatile in the previous year. The stock has dropped 8.7% so far this year, underperforming the S&P 500’s YTD return of 2%. In 2022, the firm was forced to eliminate over 5,200 jobs, or over 20% of its workforce. Expanding its partnerships has also proved a challenge. In his shareholder letter, CEO Barry McCarthy admitted that his firm’s premium co-branded Bike experiment with the University of Michigan had not worked as expected. They plan to shutter this hardware initiative.
Nevertheless, Peloton has seen some success with other initiatives. The firm’s strategy of selling through third parties like Amazon (NASDAQ: AMZN ) and Dick’s Sporting Goods (NYSE: DKS ), for instance, has proved successful. The company saw unit growth of 74% in Q2 through third-party sales. Management also predicts more than 100% year-over-year revenue growth for FY24 from the bike rental service.
While the revenue fell short of last year’s figures, McCarthy remains optimistic about returning the company to positive free cash flow and restoring revenue growth. The company is next expected to report earnings in May.
On the date of publication, Thomas Yeung did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .
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