Peloton (PTON) - Rising in the time of uncertainty 🤷
-Great interest on this stock but is it worth it? Well lets take a look at the company and the situation.
-Peloton’s shares soared almost 21% on Monday, closing slightly above the company’s debut price of $29, as the beaten-down connected fitness company attracts interest from outsiders.
-Thus far, reports have named Amazon and Nike as potential suitors. One analyst thinks Apple is “aggressively involved,” too. But all talks are preliminary, and Peloton has yet to kick off a formal sales process
-For one, CEO John Foley along with other Peloton insiders had a combined voting control of roughly 80% as of Sept. 30, making it practically impossible for any deal to go through without their approval.
Baird analyst Jonathan Komp said in a research note on Monday that Foley likely won’t be willing to sell, unless there is enough internal pressure stemming from Peloton’s recent stock sell-off.
-Financially company is not really doing well as the Q2 2022 results were a total disaster with an EPS of -33% and Earnings -1.51%. This year alone the stock fell 79% from its former price point.
Another big issue financially is that the company is not in profit and won't be for the future 3 years. With the current economical situation where the economy might get unstable after the rate rise, any unprofitable company is at a great risk. Golden rule, positive cash flow is the king!
But we think the biggest issue is that they have less than 1 year of cash runway..
-Revenue vs Market: PTON's revenue (16.9% per year) is forecast to grow faster than the US market (9% per year). This is good!
-High Growth Revenue: PTON's revenue (16.9% per year) is forecast to grow slower than 20% per year. Not so good for a company that is expected to grow faster than the industry and the market average.
Our Target Price:
1st Target: $35
2nd Target: $24
-Peloton’s shares soared almost 21% on Monday, closing slightly above the company’s debut price of $29, as the beaten-down connected fitness company attracts interest from outsiders.
-Thus far, reports have named Amazon and Nike as potential suitors. One analyst thinks Apple is “aggressively involved,” too. But all talks are preliminary, and Peloton has yet to kick off a formal sales process
-For one, CEO John Foley along with other Peloton insiders had a combined voting control of roughly 80% as of Sept. 30, making it practically impossible for any deal to go through without their approval.
Baird analyst Jonathan Komp said in a research note on Monday that Foley likely won’t be willing to sell, unless there is enough internal pressure stemming from Peloton’s recent stock sell-off.
-Financially company is not really doing well as the Q2 2022 results were a total disaster with an EPS of -33% and Earnings -1.51%. This year alone the stock fell 79% from its former price point.
Another big issue financially is that the company is not in profit and won't be for the future 3 years. With the current economical situation where the economy might get unstable after the rate rise, any unprofitable company is at a great risk. Golden rule, positive cash flow is the king!
But we think the biggest issue is that they have less than 1 year of cash runway..
-Revenue vs Market: PTON's revenue (16.9% per year) is forecast to grow faster than the US market (9% per year). This is good!
-High Growth Revenue: PTON's revenue (16.9% per year) is forecast to grow slower than 20% per year. Not so good for a company that is expected to grow faster than the industry and the market average.
Our Target Price:
1st Target: $35
2nd Target: $24