🚴 Flourishing Of The Fittest? (Not Just Survival!)

Fitness junkies 💚 Peloton

Hey Global Investor, here’s what you need to know before the US markets open.

Market Snapshot 📈

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Flourishing Of The Fittest? (Not Just Survival!)

Consumers piled on to Peloton’s products and workout classes during the pandemic. The results allowed the company to showcase its financial muscle.

Background: Peloton is the brainchild of Graham Stanton, Hisao Kushi, John Foley, Tom Cortese, and Yony Feng. Founded in 2012, the company provides high-end fitness equipment such as stationary bicycle and treadmill. Peloton Digital monthly subscriptions enable customers to stream workout content from Peloton’s celebrity-instructors such as Robin Arzon, Jess King, and Alex Toussaint.

The company went public in September 2019 and raised $1.16B by selling 40M shares priced at $29 apiece.

What Happened?: Peloton’s sales grew 232% on a Y-o-Y basis in fiscal Q1. On cue, the company has revised the outlook for FY21, projecting total revenue of $3.9+B, up from the earlier estimate of $3.5B. The company also expects this holiday quarter to be its first billion-dollar quarter in terms of sales. Analysts were predicting $939M in revenue for the holiday quarter.

Key Numbers:

  • EPS: $0.20 vs. $0.11 expected
  • Revenue: $757.9M vs. $748.1M expected

The company has struggled to meet increased demand even as it benefitted from more people staying at home. Customers have reported delayed shipments and poor service, which Peloton is trying to counter by opening new manufacturing facilities and enhancing shipping-related operations.

Peloton ended the quarter with over 1.33M connected fitness subscribers, up 137% from last year. It expects that number to increase to 1.63M in fiscal Q2 and to 2.17M by the end of the fiscal year. These subscribers pay $39 per month to stream Peloton’s workout classes on their Peloton equipment. Consumers who access the programs separately through phone or tablet pay just $12.99 per month.

The company is also ramping up its content production to cater to an increasing number of users. Peloton produced over 2400 new classes during the quarter to ensure there’s enough variety for users.

Market Reaction: Peloton stock is up over 343% YTD. The stock closed at $125.46, down 0.92% on Friday as investors evaluate the company’s ability to ramp up logistics ahead of what promises to be a busy holiday season.

Company Snapshot 📈

PTON $125.46 -1.17 (-0.92%)

Analyst Rating (26 Ratings) BUY 85%  HOLD 12%  SELL 4%

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