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Factors Setting the Tone For Peloton's (PTON) Q1 Earnings
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Peloton Interactive, Inc. (PTON - Free Report) is scheduled to report first-quarter fiscal 2022 results on Nov 4, after market close. In the previous quarter, the company reported a negative earnings surprise of 133.3%.
Which Way are Estimates Headed?
The Zacks Consensus Estimate for fiscal first-quarter bottom line is pegged at a loss of $1.15 per share, indicating a plunge of 675% from 20 cents reported in the year-ago quarter.
The consensus mark for revenues is pegged at $804.1 million, suggesting growth of 6.1% from the prior-year quarter’s reported figure.
Let's take a look at how things have shaped up in the quarter.
Factors at Play
Peloton’s fiscal first-quarter performance is likely to have benefitted from improved subscriber growth, reduced prices and revised financing options for its Bike+ and Tread products. This along with focus on extending manufacturing base with related shipment and delivery, innovation for its fitness product portfolio and content offerings (for cardio and strength training) is likely to have driven fiscal first-quarter top line. For the fiscal first quarter, the company anticipates total revenues of $800 million, which suggests growth of 5.6% year over year.
The company is optimistic about its connected fitness subscribers and digital products. As of Jun 30, 2021, the company had over 5.9 million global members, including nearly 874,000 digital subscribers. Given the digital accessibility and compatibility with multiple operating systems, the company expects it to be a major growth driver in the fiscal first quarter. For the quarter under review, the company expects connected fitness subscriptions of 2.47 million, which suggests a year-over-year surge of 85%.
However, elevated expenses related to certain commodities (steel and semiconductors), last-mile delivery costs and higher freight costs are likely to have hurt margins in the to-be-reported quarter.
What Our Model Says
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 -6.96%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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 post an earnings beat this quarter:
Sonos, Inc. (SONO - Free Report) has a Zacks Rank #1 and an Earnings ESP of +200.00%.
Hanesbrands Inc. (HBI - Free Report) has a Zacks Rank #2 and an Earnings ESP of +1.06%.
PlayAGS, Inc. (AGS - Free Report) has a Zacks Rank #3 and an Earnings ESP of +27.63%.
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Factors Setting the Tone For Peloton's (PTON) Q1 Earnings
Peloton Interactive, Inc. (PTON - Free Report) is scheduled to report first-quarter fiscal 2022 results on Nov 4, after market close. In the previous quarter, the company reported a negative earnings surprise of 133.3%.
Which Way are Estimates Headed?
The Zacks Consensus Estimate for fiscal first-quarter bottom line is pegged at a loss of $1.15 per share, indicating a plunge of 675% from 20 cents reported in the year-ago quarter.
The consensus mark for revenues is pegged at $804.1 million, suggesting growth of 6.1% from the prior-year quarter’s reported figure.
Peloton Interactive, Inc. Price and EPS Surprise
Peloton Interactive, Inc. price-eps-surprise | Peloton Interactive, Inc. Quote
Let's take a look at how things have shaped up in the quarter.
Factors at Play
Peloton’s fiscal first-quarter performance is likely to have benefitted from improved subscriber growth, reduced prices and revised financing options for its Bike+ and Tread products. This along with focus on extending manufacturing base with related shipment and delivery, innovation for its fitness product portfolio and content offerings (for cardio and strength training) is likely to have driven fiscal first-quarter top line. For the fiscal first quarter, the company anticipates total revenues of $800 million, which suggests growth of 5.6% year over year.
The company is optimistic about its connected fitness subscribers and digital products. As of Jun 30, 2021, the company had over 5.9 million global members, including nearly 874,000 digital subscribers. Given the digital accessibility and compatibility with multiple operating systems, the company expects it to be a major growth driver in the fiscal first quarter. For the quarter under review, the company expects connected fitness subscriptions of 2.47 million, which suggests a year-over-year surge of 85%.
However, elevated expenses related to certain commodities (steel and semiconductors), last-mile delivery costs and higher freight costs are likely to have hurt margins in the to-be-reported quarter.
What Our Model Says
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 -6.96%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Peloton, currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stock With Favorable Combinations
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 post an earnings beat this quarter:
Sonos, Inc. (SONO - Free Report) has a Zacks Rank #1 and an Earnings ESP of +200.00%.
Hanesbrands Inc. (HBI - Free Report) has a Zacks Rank #2 and an Earnings ESP of +1.06%.
PlayAGS, Inc. (AGS - Free Report) has a Zacks Rank #3 and an Earnings ESP of +27.63%.