Why Investors Shouldn't Get Too Excited About Peloton's Profit Spurt
Peloton Interactive's (NASDAQ: PTON) fiscal fourth quarter couldn't have been better. Connected fitness subscriptions hit triple-digit growth rates as more people shifted to at-home fitness options. The quarter was so strong that management didn't have to spend much on marketing to drive sales, which lifted profits.
The pullback in marketing spending allowed Peloton to report its first net profit, but investors shouldn't expect earnings to continue growing. Peloton is launching new products, lowering prices on older products, and continuing to expand its manufacturing capabilities, which will require investment and pressure margins going forward.
Image source: Peloton Interactive.
Source Fool.com
