The peloton compares Netflix and Amazon as a demand boom


Peloton is excited about the growth potential for its connected fitness offering, which provides access to virtual workouts.

peloton

Investors have recently voiced some concerns about whether popular “stay-at-home” companies will be able to maintain their momentum, but analysts seem optimistic about the prospects for Peloton Interactive Inc.

Shares of peloton PTON,
+ 3.06%
The manufacturer of connected exercise equipment reported a record quarterly revenue and its first quarterly profit since Friday morning business reported a rise of nearly 3%, while revealing that it was still in demand due to increased demand during the COVID-19 crisis. There was a big backlog.

“While we’ve bothered minor concerns about the full-year guide in front of many COVID-related unknowns, managing expectations of more than 2 million connected fitness customers to exit FY 2121 compared to sell-off of about 20 % Are higher, ”Evercore ISI analyst Lee Horowitz mentioned the company’s subscription service for video-based workouts.

Horowitz called the peloton “the most obvious long-term beneficiary from COVID in the consumer Internet” and argued that “as indicated by the company’s guidance, the benefits from this unfortunate crisis are likely to prove incredibly sticky.”

He maintained an improved rating on the stock and raised his price target to $ 120 from around $ 62.

Rosenblatt Securities analyst Bernie McTernan also carried the momentum of membership. “The earnings stance was superior to the expected Connected Fitness Subscriber Guide, which was almost double the number of subscribers and calls without a huge impact on value. [treadmill] We expect to be an important driver in FY’22E, ” he wrote. “A focus on affordability should accelerate the mix shift of revenue and profits towards subscriptions, which is the key value producer for the company.”

McTernan has a buy rating on Peloton’s stock and has moved its price target from $ 105 to $ 130.

Read: Peloton lowered signature exercise bike price, launched fancy bike and low-cost treadmill

Stifel analyst Scott DeWitt argued that the peloton has a larger runway and compared the company to Netflix Inc. NFLX, Se.
+ 0.70%
And Amazon.com Inc. AMZN,
-0.57%

“Future gyms can be left mostly in muscles, hookups, and tight quarters, because a large proportion of the population prefers to work at home, now technology allows for it,” he wrote. .

DeWitt has written that the peloton has a “huge lead” in in-home cardio workouts and will eventually offer its strength “like” [how] Amazon started with books and now everything is in store. “In addition,” the event will spread worldwide and has significant cost advantages for producing content on a global basis like Netflix. ” He wrote, repeating a rating and raising his price target from $ 72 to $ 120.

Barclays analyst Deepak Mathivanan wrote that the peloton has already resumed sales of its tees in many markets, as COVID restrictions ease, leading to stronger bike sales revenue growth next quarter Should contribute to “

Mathivanan warned that there were still some negatives in the latest commentary, with the company expected to reduce gross margins for its connected fitness product and that the upcoming low-traded treadmill offering could also put pressure on gross margins.

He continues to overweight the stock, raising his price target from $ 74 to $ 110.

According to FactSet, at least 19 analysts placed their price targets on the stock of Peloton after the report. Of the 26 analysts tracked by Fellocet that cover Peloton’s stock, 23 have Buy ratings, two have Buy ratings, and one has Sell ratings. The listed average price target is $ 110.08.

According to financial data and analytics company S3 Partners, the peloton had the lowest interest in shares of the domestic leisure products sector, worth $ 492 million as of Sept 10. The market losses so far this year were reduced by $ 575 million.

Shares of Peloton have rallied over 200% by 2020 as the S&P 500 SPX.
+ 0.38%
There is an increase of 3.8%.

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