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Peloton stock roars as earnings smash estimates, posts first ever profit on coronavirus boost

Peloton (PTON) on Thursday reported earnings that demolished Wall Street’s expectations, with the company bolstered by the COVID-19 outbreak that shuttered gyms — and kept fitness conscious consumers working out at home.

The stock initially popped by nearly 10% in after hours trading and was still up over 5% just after 10 a.m. EST on Friday morning.

The company posted a profit for the first time ever, as sales of the company’s high-end bikes and treadmills grew 172% year-over-year. Net income for the fiscal fourth quarter came in at $89.1 million, compared to a net loss of $47.4 million in the same period last year.

Here’s how Peloton performed during the quarter, compared to Bloomberg consensus expectations:

  • Revenue: $607.1 million vs. estimates for $581.1 million

  • Adjusted earnings per share: $0.27 vs. estimates for $0.116

  • Connected fitness subscribers: 1.09 million vs. estimates of 1.08 million

  • Paid digital subscribers: 316,800 vs. estimates of 251,640

  • FY 2021 revenue (estimate): $3.5 billion to $3.7 billion vs. estimates of $2.7 billion

The home fitness company went from a niche brand with a cult following to one of the biggest winners of the coronavirus pandemic. Peloton also added more subscribers than anticipated.

The stock is up over 200% so far this year, with the pandemic keeping many gyms closed across the country, which have just started to reopen in certain areas. Peloton said nearly all 103 of its showroom locations have resumed operations, as lockdowns around the country ease and new infections show signs of flagging in key regions.

Meanwhile, subsequent supply constraints and back orders have kept Peloton scrambling to keep up with the surge in demand.

Heading into the quarterly report, analysts overall were feeling bullish on the stock, with 24 buys, two holds, and only one sell rating. Analyst James Hardiman of Wedbush Securities said, “It was an excellent quarter, but that should be a surprise to no one. The story is profitability and EBIDTA guidance for fiscal 2021..exceeding our already bullish forecasts,” James Hardiman of Wedbush Securities told Yahoo Finance.

Earlier this week, Peloton announced a product revamp, cutting the price of its signature bike by 15%, from $2,245 to $1,895 and revealing its new $2,495 Bike+ with a rotating screen and easy Apple Watch integration.

Additionally, the company announced its current Tread will be renamed Tread+ and still sell for $4,295. A cheaper Tread will go on sale for $2,495. These additional offerings and price adjustments come as the company continues to expand its customer base, trying to use the slightly lower price as a more accessible, aspirational luxury offering.

Peloton has managed to gain more ground with upstarts flooding the space, from vertical cardio machine CLMBR, rowing contraption Hydrow, and at-home personal trainers Tempo and Mirror — the latter was acquired by Lululemon (LULU) in June.

Melody Hahm is Yahoo Finance’s West Coast correspondent, covering entrepreneurship, technology and culture. Follow her on Twitter @melodyhahm.

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