Where next for Peloton shares as Covid-19 boosts home workouts?
The US-based exercise equipment and media company’s shares are soaring after its full-year results revealed that sales have surged due to the Covid-19 boosting interest in home workouts.
- Peloton shares up 182% year-to-date and set to climb even higher
- The exercise equipment and media company saw sales surge amid Covid-19
- Peloton benefitting from coronavirus driving interest in home workouts
Peloton Interactive continues to see its share price move higher after its full-year results revealed a signifcant surge in sales due to the coronavirus increasing peoples interest in home workout equipment and remote exercise sessions.
‘Demand... remains strong and member engagement remains elevated, despite improving weather and the gradual reopening,’ Peloton CEO John Foley said on an analyst call after the company’s full year results last week.
The company has also said that it plans to reduce the cost of its bikes and treadmills to help make their products more accessible to a wider audience. However, the announcement was followed by plans to launch premium versions of its equipment that will sell at a higher price point.
‘By the end of FY 2020 our Peloton membership base grew to approximately 3.1 million, compared to 1.4 million members in the prior year,’ the company said in its full-year results. ‘Fuelled in part by the challenges associated with COVID-19, Member engagement reached new highs with 164 million Connected Fitness Subscription workouts completed in FY 2020.’
Peloton shares are up 5% on Tuesday at the time of publication, with the stock up 182% year-to-date.
Peloton full-year 2020 earnings: key figures
Revenue up 172% year-on-year (YoY)to $607.1 million
Connected Fitness subscriptions up 113% YoY to $1.09 million
Average net monthly connected fitness churn at 0.52%
Gross profit: $288.8 million (47.6% gross margin)
Total operating expenses sit at $191.8 million (33% of revenue)
Peloton expects to deliver a strong FY 2021
‘We entered Q1 FY 2021 with a backlog of $230 million Bike deliveries in all geographies and sales continue to surpass expectations in the first two months of the quarter,’ the company said in a statement.
The unexpected resurgence of Covid-19 cases in many states has led to an imbalance of supply and demand in many geographies, causing continued elongated order-to-delivery windows for many of its customers.
‘While we have significantly increased our production capacity in recent months and continue to grow our manufacturing capabilities, we do not expect to return to normalized order-to-delivery windows in the US prior to the end of Q2 FY 2021,’ it added.
Peloton: FY 2021 forecast
2.05 million to 2.10 million ending Connected Fitness Subscriptions, growth of 90% at the midpoint
Average Net Monthly Connected Fitness Churn under 1.00%
$3.50 billion to $3.65 billion total revenue, 96% growth at midpoint
Gross Profit Margin of approximately 41%
$200 million to $275 million Adjusted EBITDA, 6.6% Adjusted EBITDA Margin at the midpoint
How to trade stocks with IG
- Create an IG trading account or log in to your existing account
- Enter ‘Peloton Interactive Inc’ in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.