Factors Setting the Tone for Peloton's (PTON) Q1 Earnings
Peloton Interactive, Inc. PTON is scheduled to report first-quarter fiscal 2024 results on Nov 2, 2023, before the opening bell. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate, but revenues surpassed the same.
Markedly, its earnings missed the consensus mark in all of the last four quarters, with the negative average surprise being 38.5%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the first-quarter bottom line is pegged at a loss of 38 cents per share, narrower than a loss of 70 cents reported in the year-ago quarter.
Peloton Interactive, Inc. Price and EPS Surprise
Peloton Interactive, Inc. price-eps-surprise | Peloton Interactive, Inc. Quote
For revenues, the consensus mark is pegged at approximately $592.1 million, suggesting a decline of 4% from the year-ago quarter’s reported figure.
Factors at Play
Peloton’s first-quarter top line is expected to have declined year over year due to a seasonal slowdown in hardware sales, reduced consumer spending and higher Connected Fitness subscription churn. However, its growth initiatives and strategic partnerships are expected to offset the adverse effects of the headwinds partially. Also, focus on global expansion bodes well.
For the to-be-reported quarter, the Zacks Consensus Estimates for Connected Fitness Products revenues is pegged at $172 million, down 15.7% year over year. Revenues from subscriptions are expected to decline 4.6% year over year to $393 million.
Meanwhile, the company's bottom line is likely to have been affected by inflationary pressure and increased sales and marketing costs.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Peloton this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. But that's not the case here.
Earnings ESP: Peloton has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With the Favorable Combination
Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to deliver an earnings beat this time around.
MGM Resorts International MGM has an Earnings ESP of +2.61% and a Zacks Rank #2.
Shares of MGM Resorts have declined 3.1% in the past year. MGM’s earnings surpassed the consensus mark in three of the four quarters and missed once, the average surprise being 105.7%.
Hyatt Hotels Corporation H has an Earnings ESP of +6.33% and a Zacks Rank #3.
Shares of Hyatt have jumped 8.1% in the past year. Hyatt’s earnings outpaced the consensus mark in each of the trailing four quarters, the average surprise being 197.3%.
DraftKings Inc. DKNG has an Earnings ESP of +17.52% and a Zacks Rank #3.
Shares of DraftKings have climbed 63.6% in the past year. DKNG’s earnings outshined the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 12%.
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Hyatt Hotels Corporation (H) : Free Stock Analysis Report
MGM Resorts International (MGM) : Free Stock Analysis Report
Peloton Interactive, Inc. (PTON) : Free Stock Analysis Report
DraftKings Inc. (DKNG) : Free Stock Analysis Report
