Peloton Stock Rises Despite $165 Million Hit to Q4 Revenue Guidance From Treadmill Safety Issues

Peloton Interactive (NASDAQ: PTON), the leading maker of connected home-exercise equipment, reported robust fiscal third-quarter 2021 results (which cover the first calendar quarter of 2021) after the market close on Thursday, May 6.

Shares immediately fell in Thursday's after-hours trading session and were down about 4.5% when the earnings call started at 5:00 p.m. EDT. We can probably attribute this initial reaction largely to short-term traders ditching the stock in advance of the call, as it was a given that management's fiscal fourth-quarter outlook would be dimmer than many investors were initially expecting. This was evident on Wednesday when the stock plunged following the company's announcement that it was recalling both of its treadmill models and pausing their sales while it remedies their known safety problems.

By the end of the earnings call, however, Peloton stock was up, and it closed Thursday's after-hours session with a gain of 5.6%. The reason for the reversal was likely that some investors were relieved the company's guidance wasn't worse.

Source Fool.com