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Peloton earned about 19 cents per share this quarter, nearly double what analysts had expected. Revenue grew about 2 percent to $559 million, marking the third consecutive quarter of growth. The company also made progress on its debt, paying down nearly $500 million so far this year.
While the financial results are improving, the core business is still losing members. The number of people paying for connected fitness subscriptions fell 9 percent compared to last year, ending at roughly 2.48 million. For long-term owners, the question is whether the company can eventually stop this slide or if it will have to rely entirely on cutting costs and managing debt to stay profitable. Profit margins were a bright spot this quarter, reaching about 61 percent, though management noted some of that gain came from one-time benefits.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Saqib Baig, the Chief Accounting Officer, notified the company on October 8 that he will leave his role on November 27 to take a job elsewhere. The company stated his departure is not due to any disagreements over financial reporting or accounting practices.
Peloton has started looking for a replacement. While a change in the accounting lead is worth watching for any shifts in financial oversight, this appears to be an orderly transition rather than a sudden exit tied to the company's performance.
Source: 8-K filing
UBS lowered its price target from $7.50 to $6.50. This move reflects a more cautious view on the company's valuation as it works through its turnaround plan. The average target across all analysts who follow the stock currently sits at $6.
Source: UBS
Management has become expert at setting a low bar and clearing it. Their recent string of beats shows they now have a firm handle on their costs and what to expect from the business.
| Expectation | |
|---|---|
| EPS | $0.11 |
| Revenue | $553M |