Peloton Interactive, Inc. (NASDAQ: PTON) was one of many major tech startups to go public in 2019 and has achieved a massive $8 billion market cap since its IPO.
It hasn’t been the smoothest ride for the interactive fitness company though. Peloton’s IPO was disappointing with shares dropping by more than 20% in the weeks following the public offering. Still, despite a broken IPO and skepticism from many investors, Peloton’s revenue continues to climb.
Shortly after its IPO, Peloton Interactive released its first earnings report — revealing some fairly impressive numbers.
Here are the highlights from Peloton’s Q1 earnings release:
- Total revenue grew 103% to $228.0 million
- Connected Fitness Subscribers grew 103%
- 94% 12-month retention rate
- Net Loss reduced to $(49.8) million, a $4.8 million improvement
Regarding this earnings report, Peloton stated, “We benefited from continued strong demand for our connected fitness experience, attributable to our effective brand and performance marketing and growing word-of-mouth referrals from our loyal Members.”
While many seem to thing Peloton is just a trend, the company maintains a very loyal customer base, which is very promising for a company reliant on subscription revenue.
Peloton Interactive: Analysts are Getting Bullish
Investors might still be hesitant to go all-in on Peloton Interactive, but analysts are saying that Peloton is here to stay. Earlier this month, Wedbush analysts went bullish on Peloton, giving it an outperform rating and a price target of $37.
To justify this rating, Wedbush analyst James Hardiman stated, “Based on our analysis of the business model, our expansive survey work of both Peloton users and prospective customers, and our own experience with the product, we do not believe that Peloton will prove to be a fad, but instead one of a small number of fitness companies likely to be an enduring force going forward.”
Whether or not investors are starting to buy in is yet to be seen, but analysts getting bullish is a good sign for Peloton.
In its Q1 earnings report, Peloton also provided its Q2 and full fiscal year 2020 business outlook.
For Q2 2020 Peloton expects:
- 680,000 to 685,000 ending Connected Fitness Subscribers
- $410 million to $420 million in total revenue
- $(70) million to $(65) million Adjusted EBITDA
For the full fiscal year, Peloton provided the following outlook:
- 885,000 to 895,000 ending Connected Fitness Subscribers
- $1.45 billion to $1.50 billion in total revenue
- $(170) million to $(150) million Adjusted EBITDA
Given the modest projections, Peloton should be able to meet or beat estimates for its second quarter. Still, the company has a long way to go to gain confidence from investors.
Article By: Connor Beam