Peloton Interactive Inc (NASDAQ:PTON) stock is trading higher by 5% in the pre-opens session despite the company had lowered guidance for FY21 (Jun), sees FY21 (Jun) revs of $4 bln from $4.075 bln vs.
$4.11 bln S&P Capital IQ Consensus; sees ending Connected Fitness subscriptions of $2.275 mln, which is in line with prior guidance
Moreover, this morning, an analyst at Telsey Advisory Group reduced the price target on the stock to $120 a share from $150 and says that the preliminary financial impact of treadmill recalls not as bad as feared (83.78)
Analyst Dana Telsey commented, “Peloton had a strong 3QF21 performance as it invested in manufacturing and expedited transportation to narrow its order-to-delivery windows for Bike and Bike+, resulting in greater deliveries and subscriber growth. Customer engagement remained high as members worked out even more (26.0 classes vs. 17.7 last year) and the adoption of at-home fitness is becoming entrenched. Overshadowing the strong 3QF21 result was the commentary around the recalls of the Tread and Tread+ announced on May 5. We believe the financial impact of the recalls in 4QF21, estimated at a $165MM hit to revenues, is not as bad as feared. The majority of the impact ($105MM) is from the lack of Tread+ sales, with Peloton estimating a $50MM impact from refunds assuming ~10% of Tread+/Tread owners ask for a full refund, a lower figure than expected. Importantly, the company believes the Tread launch could proceed n the US this summer, potentially as early as July, earlier than we anticipated.”
PTON stock crashed almost 18%on Wednesday the company made a voluntary recall of the treadmill models Tread+ and Tread
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