Peloton Sweated Out Stronger-Than-Expected Earnings

Peloton Sweated Out Stronger-Than-Expected Earnings

almost 4 years ago2 mins

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Okay, Peloton in New York, let’s do this: the luxury exercise equipment-maker made its quarterly update count late on Wednesday, and its stock dug deep to climb 17% higher on Thursday. Great job, you smashed it! 💦

What does this mean?

$2000 price tag or not, Peloton’s workout bikes didn’t seem too expensive for the higher-than-expected number of customers who bought them last quarter, which led to 66% higher revenue versus the same time last year. Likewise, Peloton’s digital subscription revenue rose by 64% as would-be gym bunnies hunkered down in their rabbit holes, only popping their heads up to scout out fresh workout content 🐇 And in what’s become a rare feat among recent earnings reports, the company even raised its revenue forecast for this quarter.

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Why should I care?

Since the company’s stock market debut last year, analysts have been debating whether Peloton would attract and keep enough customers to become a lasting business. And its latest update added fuel to both sides’ fires: a raft of new customers suggested coronavirus might’ve accelerated the home workout trend, sure, but the sky-high percentage of monthly – rather than annual – subscriptions hinted that customers might be poised to flock back to their gyms 🚴‍♂️ Still, the naysayers seem to be losing the argument for now: Peloton’s stock was up 34% this year before Thursday.

In a textbook example of how a brand can try to increase its customer appeal, Peloton’s planning to broaden its product range with a rowing machine and a cheaper treadmill. The company might be hoping that if it turns you into a die-hard customer, you’ll become an investor too 🤨 Warren Buffett, after all, reportedly invested in Coca-Cola because he liked the taste of the soft drink and figured others would too – making the business one he understood and, in turn, meeting one of his investment conditions.

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