Peloton (PTON, $84.71) beats fiscal Q4 earnings and revenue expectations

Peloton  reported fiscal year 2020 Q4 earnings that surpassed analysts’ estimates.

The online fitness/workout company’s adjusted earnings per share came in at $0.27, beating expectations of $0.10 per share.

Revenues of $607.1 million exceeded expectations of $582.5 million.

Peloton’s Q4 adjusted EBITDA of $143.6 million yielded an adjusted EBITDA margin of 23.7%.

The company's gross margins expanded +275bps year-over-year to 47.6%.

Connected Fitness subscription base grew +113% during the quarter to over 1 million.

CEO Jill Woodworth said, “We're proud of how quickly we have achieved our profitability, but our priorities are unchanged. We will continue to invest aggressively in new product development, scaling our manufacturing capabilities, introducing new software features and adding more fitness and wellness programming in order to capitalize on what we believe is a massive global market opportunity.”

Tickeron's analysis shows: 

Momentum Indicator for PTON turns positive, indicating new upward trend

PTON saw its Momentum Indicator move above the 0 level on August 25, 2020. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 14 similar instances where the indicator turned positive. In 14 of the 14 cases, the stock moved higher in the following days. The odds of a move higher are at 90%.

Current price $84.71 is above $64.36 the highest resistance line found by A.I. Throughout the month of 08/10/20 - 09/10/20, the price experienced a +31% Uptrend, while the week of 09/02/20 - 09/10/20 shows a -4% Downtrend.

Technical Analysis (Indicators)

Bullish Trend Analysis

The Moving Average Convergence Divergence (MACD) for PTON just turned positive on August 28, 2020. Looking at past instances where PTON's MACD turned positive, the stock continued to rise in 7 of 7 cases over the following month. The odds of a continued upward trend are 90%.

Following a +13.07% 3-day Advance, the price is estimated to grow further. Considering data from situations where PTON advanced for three days, in 57 of 62 cases, the price rose further within the following month. The odds of a continued upward trend are 90%.

The Aroon Indicator entered an Uptrend today. In 56 of 56 cases where PTON Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 90%.

Bearish Trend Analysis

The 10-day RSI Indicator for PTON moved out of overbought territory on September 10, 2020. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 6 similar instances where the indicator moved out of overbought territory. In 6 of the 6 cases, the stock moved lower in the following days. This puts the odds of a move lower at 90%.

The Stochastic Indicator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where Apple declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 63%.

PTON broke above its upper Bollinger Band on August 28, 2020. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 84%. During the last month, the daily ratio of advancing to declining volumes was 1.18 to 1.

The Tickeron Price Growth Rating for this company is 34 (best 1 - 100 worst), indicating steady price growth. PTON’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Valuation Rating of 81 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: PTON's P/B Ratio (16.32) is slightly higher than the industry average of (4.75). P/E Ratio (0.00) is within average values for comparable stocks, (92.86). Projected Growth (PEG Ratio) (0.00) is also within normal values, averaging (2.27). Dividend Yield (0.00) settles around the average of (0.57) among similar stocks. P/S Ratio (5.17) is also within normal values, averaging (7.62).

The Tickeron SMR rating for this company is 97 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron PE Growth Rating for this company is 100 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PTON’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock worse than average.

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