Peloton earnings: What to expect from the maker of exercise bikes

Here’s what to watch for in the upcoming report:

What to expect

Earnings: Analysts tracked by FactSet expect Peloton to report a 40-cent loss per share, whereas the company lost $3.68 a share in the year-prior period.

Revenue: The FactSet consensus is for $641 million in revenue, down from $679 million a year earlier.

Stock movement: Peloton shares tend to take big swings after earnings, logging double-digit-percentage moves in the session following five of the company’s past seven reports.

The stock is down 95% from its pandemic-era all-time closing high of $167.42 achieved in January 2021, and it’s off about 12% so far this year.

Of the 26 analysts tracked by FactSet who cover Peloton’s stock, 10 have buy ratings, 13 have hold ratings and three have sell ratings, with an average price target of $11.36.

What else to watch for

“The key metrics we look at are subscriber growth, retention and engagement,” Bernstein analyst Aneesha Sherman said in a recent note to clients.

She expects the company to deliver 101,000 gross subscriber additions, which would mark a sequential decline. Peloton historically sees subscriber additions fall sequentially during the summer as the company pulls back on marketing due to greater interest in outdoor exercise, though she also sees the “softer consumer macro” playing a role.

She’ll also be looking for updates on user traction in the wake of Peloton’s recent app relaunch.

“[W]e really like this digital app relaunch as it leans into the most attractive, differentiated, and sticky subs portion of the business and away from the low-margin and less differentiated hardware side,” Sherman wrote.

Third-party data from SensorTower suggests an 11% year-over-year drop in monthly active users for Peloton during the June quarter, which would mark the sixth quarter in a row of year-over-year declines.

UBS analyst Arpine Kocharyan added that while she saw a “positive trend” in total interactive visits to Peloton’s website during May and June, that momentum “didn’t hold up in July.”

“We believe consistent momentum in positive growth in total interactive visits could mean traction in demand, but we are also mindful of significant promotional activity in seasonally slower months and ahead of new app launch that could have temporarily push these metrics higher,” she wrote.

Cowen & Co.’s John Blackledge will have his eye on Peloton’s progress toward breakeven free cash flow and on margins.