Shares of the popular interactive fitness platform, Peloton Interactive Inc. (NASDAQ: PTON), fell by more than 10% after the company reported earnings on Wednesday.
Peloton has created a good presence in interactive fitness and is notably known for its exercise bikes that are equipped with features enabling users to join virtual spin classes from their homes. The exercise bikes sell for more than $2,000 a pop.
Peloton had seen a lackluster IPO in September last year. Shares of Peloton started trading at $27 per share, about 11% below its IPO pricing of $29 per share.
However, the shares recovered and performed reasonably well through the year with its stock closing at $28.4 on Dec 31, 2019, after reaching an intermediate high of $36.8.
Peloton currently trades at $29 per share and is still 12.5% higher than its IPO price.
In its Q2 2020 fiscal results, Peloton reported better than anticipated revenue and earnings. Quarterly revenue came in at $466.3 million significantly higher than market expectations of $423 million. The company reported a loss of $0.20 per share which also beat market expectations that stood at a loss of $0.35 per share.
However, the earnings forecast for the next quarter dampened investor sentiment. The company expects revenue between $470 million and $480 million for the coming quarter well below analyst expectations of $494 million.
Peloton expects to reach a subscriber base of 920,000 to 930,000 and earn revenues between $1.53 billion to $1.55 billion in the fiscal year 2020.
Peloton is an interesting stock to watch out for. Increasing the user base, improving engagement and reducing churn while maintaining a trend towards increasing revenues and profitability will determine how the stock spins over this year.