Shares of Peloton have dropped 40% this year.
Courtesy Peloton
Peloton Interactive
is scheduled to report fiscal-first-quarter earnings before the market opens Thursday, and analysts are expecting to see a revenue decline.
For the fiscal first quarter ended Sept. 30, analysts surveyed by FactSet expect that the maker of spin bikes and treadmills will post a loss of 34 cents a share on revenue of $589 million. In the same period last year, Peloton (ticker: PTON) posted a loss of $1.20 a share on revenue of $617 million.
Analysts also expect the company to report a total of 2.99 million connected-fitness subscribers, an increase from 2.96 million a year ago, but down from 3.08 million in the fourth quarter.
“We believe cracks are forming in Peloton’s ability to grow subscribers,” BofA Securities analyst Curtis Nagle wrote in an Oct. 19 note.
“In our view, shares do not reflect risk to revenue from increased churn due to declining platform engagement and subscriber base that is increasingly at risk as Covid cohorts reach the average subscriber lifetime,” Nagle said. He downgraded Peloton stock to Underperform from Neutral, and cut his price target to $4.15 from $6.50.
Peloton did not immediately respond to a request for comment. However, in the company’s fourth-quarter earnings call in August, Chief Financial Officer Elizabeth Coddington said Peloton expects churn to decrease in the fiscal first quarter from the fiscal fourth quarter as seasonal trends improve.
Peloton
was a pandemic winner. The company saw the peak of its success during a time of gym closures and a lockdown on in-person gatherings. But now with gyms open and inflation pinching consumer’s wallets, Peloton has struggled. Shares have tumbled 97% to $4.72 in Wednesday trading from a record high of $167.42 in January 2021, according to Dow Jones Market Data.
Write to Angela Palumbo at [email protected]
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