Why Peloton Stock Is Cratering This Week

Shares of Peloton Interactive (NASDAQ: PTON) have fallen by more than 10% this week, according to data from S&P Global Market Intelligence. The at-home fitness company posted disappointing earnings as the new management team tried to implement a turnaround strategy for the struggling brand. As of the market close on Thursday, May 4, shares of Peloton are down 14% this week. 

Before the market opened on May 4, Peloton updated investors with its quarterly financial results for the first three months of 2023. Revenue declined 22% year over year in the period to $749 million, which actually significantly beat analyst expectations of $708 million in sales. However, earnings per share lagged analyst projections, coming in at a loss of 79 cents vs. the 49 cents estimate. This is likely why shares of the stock dropped so much this week.

Investors are also concerned about the company's forward guidance for its upcoming fourth quarter, which covers the three months ending in June. Peloton is guiding for connected fitness subscribers (i.e., its paying members) to decline quarter over quarter for the first time in its history, going from 3.11 million to 3.08 million. This would still be up from Q4 of last year but does indicate that Peloton is struggling to attract members to its connected fitness service with the pandemic behind us. And it is certainly very far away from its historical goal of reaching 100 million paying members.

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Source Fool.com