Peloton stock tumbles on earnings, disappointing guidance
Shares of Peloton Interactive (PTON) have fallen more than 20% in Thursday's trading. The fitness company reported mixed second-quarter results and its third-quarter revenue guidance of $700 million to $725 million fell short of expectations. Following the report, Needham & Company Managing Director Bernie McTernan told Yahoo Finance that ultimately "The problem is, it's a great product, just not a great stock at this point."
Yahoo Finance's Josh Lipton and Julie Hyman break down the trending ticker.
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Editor's note: This article was written by Stephanie Mikulich
Video Transcript
JOSH LIPTON: Let's get some tickers here. Peloton shares, they are sinking here after reporting mixed second quarter results. The fitness company's third quarter guidance also disappointing the Street, Julie. So stocks in the red. By the way, it was already down about 10% this year, headed into the print. But the story is yes, they're projecting revenue $700 to $725 million during their Q3. That is not going to cut it. The Street was close to $756. And by the way that's a drop from the $749 in the year ago period.
JULIE HYMAN: This stock will-- I mean, this company just has not been able to catch a break. Yeah, you've got a few little feints in the right direction. But overall, you've seen it drop somewhat 90% from its highs, where it was back in 2020, and everybody was buying a Peloton. And Barry McCarthy--
JOSH LIPTON: Look at that chart.
JULIE HYMAN: Yeah, I mean, you know, we've-- Barry McCarthy rather, the CEO, has really tried to throw a lot at the wall to see what was going to work. Most recently, one of the efforts of Peloton was to forge partnerships with universities. And the University of Michigan was the first one of these. Well, it didn't really work. So he says, guess what? We're not really going to go ahead in the same direction with that kind of partnership. But he keeps trying here.
He has talked about that sales through retailers, including Amazon, including Dick's Sporting Goods, that those have been going a little bit better. But it's just I think that investors have sort of wrapped their head around the idea that this is not what it was one-- once thought to be. That said, there are still a lot of subscribers on this thing, 6.4 million in the holiday quarter. It's down 4% year-over-year. But that's still a lot of folks, a lot of eyeballs on those platforms.
JOSH LIPTON: Yeah, most of the street are still on the sidelines, including Truist. Here's what they told their clients today. They said, "we believe that Peloton should be able to start growing sustainably again in 2025, but visibility into the ultimate pace of growth and its margin profile remain low."
JULIE HYMAN: Do you have a Peloton?
JOSH LIPTON: I don't, no.
JULIE HYMAN: Me neither.
