A Tale of Two Peloton Analysts
Investors sweating out Peloton's (NASDAQ: PTON) fiscal second-quarter results this week may still be wondering if the leader of high-end workouts is working out. Peloton posted its financial update after Wednesday's market close, and while the shares initially moved lower on the report, there are at least two Wall Street pros who can't seem to see eye to eye as to where Peloton stock goes from here.
BMO Capital analyst Simon Siegel is lowering his price target from $27 to $26 following the fresh financials. Peloton's numbers beat Wall Street expectations, but its guidance for the current quarter did not impress. Siegel is also concerned that users will trade down to Peloton's cheaper digital subscription offering. He is sticking with his neutral "market perform" rating, but the new $26 price goal is well below both Wednesday's close of $32.70 and September's IPO price of $29. In short, Siegel sees a broken IPO in the making.
At the other end of the spectrum, Youssef Squali at SunTrust is boosting his price target from $30 to $37. He concedes that Peloton's guidance calling for 50% top-line growth in the current quarter is light, but he feels that the sharply decelerating revenue isn't as shocking when you consider that Peloton's fiscal third quarter is being stacked up against a 122% growth spurt a year earlier. He sees a company scoring significant margin leverage at this point as it executes on lifting the visibility of its brand and offers innovative and easy financing strategies to get more sweat seekers onto its platform.
Source Fool.com
