Peloton's Q4 Sales Beat Estimates, Stock Jumps 12.5%
Peloton (NASDAQ: PTON), an exercise equipment company, reported better-than-expected revenue for Q4 CY2024. Revenue reached $673.9 million, exceeding analyst estimates of $655.2 million. However, sales witnessed a year-on-year decline of 9.4%.
Despite the revenue outperformance, the company's next-quarter revenue guidance of $615 million disappointed, falling short of analyst estimates by 6%. Additionally, Peloton's GAAP loss per share of $0.24 missed analyst consensus by 25.9%.
Key Highlights:
* Revenue: $673.9 million (beat by 2.9%)
* EPS (GAAP): -$0.24 (missed by 25.9%)
* Adjusted EBITDA: $58.4 million (beat by 8.7%)
* Operating Margin: -6.8% (improvement from -25.2% YoY)
* Free Cash Flow: $106 million (up from -$37.2 million YoY)
* Connected Fitness Subscribers: 2.88 million (decline of 125,000 YoY)
Management slightly raised its full-year revenue guidance to $2.46 billion, and its EBITDA guidance to $325 million. Despite these adjustments, the company's two-year revenue decline trend remains a concern.
Peloton's cash flow situation has improved, with positive free cash flow reported in Q4. Analysts predict further improvement, with a free cash flow margin of 10% estimated for the next 12 months.
While the company's profitability is strong and a turnaround is underway, the revenue guidance shortfall and ongoing sales decline raise concerns about its long-term prospects. To evaluate Peloton's potential as an investment, it's crucial to consider its valuation, business qualities, and recent earnings performance.