Peloton Interactive (NASDAQ:PTON) Shares Gap Up Following Better-Than-Expected Earnings

Key Points

• Peloton beat quarterly earnings expectations: EPS was $0.19 versus the $0.11 consensus, while revenue of $559.2 million topped estimates of $553.46 million and rose 1.5% year over year.
• Shares opened at $5.98 after previously closing at $5.46, but later traded at $5.424, below the prior close.
• Analyst sentiment remained cautious: the consensus rating was Hold, with a $7.60 average price target; five analysts rated the stock Buy, seven Hold, and one Sell.

Peloton Interactive, Inc. (NASDAQ:PTON - Get Free Report) shares gapped up prior to trading on Thursday following a stronger than expected earnings report. The stock had previously closed at $5.46, but opened at $5.98. Peloton Interactive shares last traded at $5.4240, with a volume of 4,505,183 shares trading hands.

The company reported $0.19 earnings per share for the quarter, topping the consensus estimate of $0.11 by $0.08. Peloton Interactive had a net margin of 2.58% and a negative return on equity of 23.92%. The business had revenue of $559.20 million for the quarter, compared to analyst estimates of $553.46 million. During the same period in the prior year, the firm posted $0.03 EPS. The company's revenue was up 1.5% on a year-over-year basis.

Wall Street Analyst Weigh In

Several research firms have recently issued reports on PTON. Morgan Stanley lowered shares of Peloton Interactive from an "equal weight" rating to an "underweight" rating and dropped their price objective for the stock from $5.00 to $4.50 in a research report on Tuesday, September 8th. Weiss Ratings raised shares of Peloton Interactive from a "sell (d+)" rating to a "hold (c-)" rating in a research report on Friday, October 2nd. The Goldman Sachs Group lowered their price target on Peloton Interactive from $7.50 to $6.50 and set a "buy" rating for the company in a report on Monday, October 26th. UBS Group cut their price objective on Peloton Interactive from $11.00 to $10.00 and set a "buy" rating on the stock in a research report on Tuesday, September 8th. Finally, Telsey Advisory Group restated a "market perform" rating on shares of Peloton Interactive in a research note on Monday, August 3rd. Five analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of "Hold" and a consensus price target of $7.60.

Insider Transactions at Peloton Interactive

In other news, COO Charles Kirol sold 28,849 shares of the stock in a transaction that occurred on Thursday, October 15th. The stock was sold at an average price of $5.33, for a total transaction of $153,765.17. Following the sale, the chief operating officer directly owned 197,334 shares in the company, valued at approximately $1,051,790.22. This represents a 12.75% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director Karen Boone sold 25,000 shares of the firm's stock in a transaction on Monday, August 17th. The shares were sold at an average price of $5.35, for a total value of $133,750.00. Following the completion of the sale, the director owned 236,063 shares in the company, valued at $1,262,937.05. The trade was a 9.58% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 217,712 shares of company stock worth $1,177,289 in the last quarter. Insiders own 1.30% of the company's stock.

Institutional Investors Weigh In On Peloton Interactive

A number of institutional investors have recently added to or reduced their stakes in the company. Ardmore Road Asset Management LP lifted its stake in shares of Peloton Interactive by 187.9% in the first quarter. Ardmore Road Asset Management LP now owns 1,500,000 shares of the company's stock valued at $6,435,000 after buying an additional 979,058 shares during the period. Technology Crossover Management IX Ltd. acquired a new stake in Peloton Interactive during the second quarter worth about $21,727,601. Bastion Asset Management Inc. bought a new position in Peloton Interactive during the first quarter valued at about $7,020,000. Kanen Wealth Management LLC bought a new position in Peloton Interactive during the first quarter valued at about $7,560,000. Finally, Altshuler Shaham Ltd bought a new position in Peloton Interactive during the first quarter valued at about $1,585,000. 77.01% of the stock is currently owned by institutional investors and hedge funds.

Peloton Interactive Trading Down 0.6%

The firm has a fifty day simple moving average of $5.12 and a 200 day simple moving average of $5.22. The stock has a market cap of $2.38 billion, a price-to-earnings ratio of 45.46, a PEG ratio of 0.42 and a beta of 2.56.

Peloton Interactive Company Profile

Peloton Interactive, Inc is a connected-fitness company that combines exercise equipment, digital content and subscription services. Its product portfolio includes the Peloton Bike, Bike+, Tread treadmill, Row rowing machine and related accessories, apparel and fitness products. The company's equipment is designed to connect users with live and on-demand instructor-led workouts through integrated screens and digital platforms.

Peloton offers subscription memberships that provide access to classes in cycling, running, strength training, yoga, meditation, rowing and other fitness disciplines.

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