Peloton Stock: Some Workouts Don't Work Out

The market is punishing stocks that come through with "beat and raise" results this earnings season. So you can probably imagine how a textbook "miss and lower" quarterly report will go over. Shares of Peloton Interactive (NASDAQ: PTON) plummeted on Tuesday morning after posting a rough financial update.

Revenue tumbled 27% to hit $964.3 million for Peloton's fiscal third quarter, ending in March, as a 55% year-over-year increase in subscription revenue was no match for a 42% plunge in the larger hardware category.

A positive result of this scenario would normally be that the top-line gains were coming from the historically high-margin part of its business, but this silver lining is actually fool's gold. Operating expenses have more than doubled over the past year, and even though one-time restructuring and goodwill impairment charges account for the lion's share of that increase, it's still not an encouraging sight when the top line is going the other way. Peloton's net loss ballooned to $757.1 million, or $2.27 a share. Analysts were holding out for a deficit of just $0.83 a share on $973 million in revenue.

Source Fool.com