Peloton Interactive Inc. is preparing to update investors on the progress of its turnaround as it releases its fiscal fourth-quarter earnings report. While the maker of connected exercise equipment is anticipated to announce another quarter of revenue declines, losses are expected to show improvement.
Analysts tracked by FactSet predict that Peloton will report a loss of 40 cents per share, a significant improvement compared to the $3.68 loss per share in the same period last year.
The FactSet consensus estimates revenue to be around $641 million for this quarter, down from $679 million in the previous year.
Historically, Peloton shares have experienced significant fluctuations following earnings announcements. In fact, the stock has seen double-digit percentage moves in the session after five out of the company’s last seven reports. Currently, the stock is down 95% from its pandemic-era all-time closing high of $167.42 achieved in January 2021. It has also declined by approximately 12% so far this year.
Among the 26 analysts tracked by FactSet who cover Peloton’s stock, 10 have buy ratings, 13 have hold ratings, and three have sell ratings. The average price target is $11.36.
Additional Factors to Monitor
As Peloton Interactive Inc. prepares to release its fiscal fourth-quarter earnings report, investors will closely analyze these factors to assess the company’s progress in its turnaround efforts.
SensorTower, a third-party data provider, suggests that Peloton experienced an 11% year-over-year drop in monthly active users during the June quarter. If confirmed, this would be the sixth consecutive quarter of year-over-year declines for Peloton.
Arpine Kocharyan, an analyst from UBS, acknowledges a positive trend in total interactive visits to Peloton’s website during May and June. However, this trend did not sustain in July. It is important to note that the consistency of positive growth in total interactive visits could indicate increased demand. Nevertheless, it is necessary to consider significant promotional activity during slower months and prior to the new app launch, which may have temporarily boosted these metrics.
Another aspect that will be closely monitored by Cowen & Co.’s John Blackledge is Peloton’s progress towards achieving breakeven free cash flow and improving margins.