Peloton's "Epic Comeback" Comes With Major Caveats
Nine months ago, connected fitness company Peloton (NASDAQ: PTON) was burning through cash at an alarming rate. In the third quarter of fiscal 2022, Peloton reported a free-cash-flow loss of nearly $750 million. For perspective, total revenue during that quarter was around $964 million.
The situation has improved since then, but investors should be careful to take the pronouncements of CEO Barry McCarthy at face value. "If you've been wondering whether or not Peloton can make an epic comeback, this quarter's results show the changes we're making are working," McCarthy said in the most recent letter to shareholders earlier this month.
Let's be clear: Peloton is still in serious trouble. Sales of connected fitness products have rebounded from their lows, but they were still down 52% year over year in the most recent quarter, and subscription revenue appears to have stalled out on a sequential basis. Peloton reported a generally accepted accounting principles (GAAP) net loss of $335 million on $793 million of revenue in the second quarter of fiscal 2023, not exactly an inspiring result.
Source Fool.com
