Peloton Stock Is Crashing on Wednesday -- Here's Why

The stock market broadly got off to a strong start Wednesday, with all three major indices in positive territory as of 10:30 a.m. ET. However, fitness technology company (NASDAQ: PTON) was a major underperformer, with shares plunging by more than 20% to a new all-time low.

As you might expect, that slump was due to the company's fiscal 2023 fourth-quarter earnings report, which it delivered before the opening bell. While Peloton beat expectations on the top line with $642 million in revenue, it posted a much larger quarterly loss than investors were looking for. While its $241.8 million net loss was certainly better than the $1.26 billion Peloton lost in the same fiscal quarter a year ago, this is still clearly not sustainable.

In addition, Peloton reported a sequential decline in subscribers. As of June 30, the end of the fiscal quarter, it had 29,000 fewer connected fitness subscribers than it had three months earlier. The recall of its bike seat post was somewhat responsible for the earnings miss, and its subscriber count of 3.08 million was 4% higher than it was a year earlier. Plus, the period under consideration is seasonally weak for most fitness companies, but Peloton's slowdown was worse than expected.

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Source Fool.com