Shares of Peloton (NASDAQ:PTON) are up by more than 20% after the stay-at-home fitness company reported its earnings for the three months ended Dec. 31. Revenue tallied in at $792.7 million, beating the average analyst estimate of $710 million for PTON stock. On the other hand, the company reported an earnings per share (EPS) loss of 98 cents, falling short of the analyst estimate for a loss of 64 cents.
Despite almost $800 million in revenue, Peloton remains unprofitable with a $335.4 million net loss, up from a loss of $439.4 million a year ago. Peloton has now been unprofitable for eight consecutive quarters, although the recently reported loss was the lowest since the fourth quarter of fiscal year 2021.
“Of course this has been a challenging year. The restructuring of our business touched the lives of many associates and friends, current and former team members, and investors alike, and not in a good way,” explained CEO Barry McCarthy. “We understand how fortunate we are to have come this far, this fast.”
Meanwhile, gross margin tallied in at 29.7%, up from 24.8% year-over-year. This was driven by subscription sales gross margin of 67.6% and hampered by a negative gross margin of 11.2% for connected fitness products such as bikes and treadmills.
In terms of guidance, Peloton expects revenue to be between $690 and $715 million for the next quarter and gross margins of approximately 39%. The company also forecasts between 3.08 and 3.09 million connected fitness subscriptions by the end of the quarter.
5 Investors Betting Big on PTON Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During Q3, 421 13F filers disclosed ownership of PTON, a decline of 42 filers from the previous quarter. Meanwhile, the institutional put/call ratio sits at 0.4, down from 0.69. That’s equivalent to 14.25 million puts and 35.91 million calls, implying a bullish options stance. With that in mind, let’s take a look at the top shareholders of Peloton:
- T. Rowe Price (NASDAQ:TROW): 48.47 million shares. T. Rowe purchased 9.7 million shares during Q3.
- Vanguard: 26.17 million shares. Vanguard sold 96,043 shares during Q3.
- Morgan Stanley (NYSE:MS): 20.95 millions shares. Morgan Stanley purchased 5.26 million shares during Q3.
- BlackRock (NYSE:BLK): 12.61 million shares. BlackRock sold 2.66 million shares during Q3.
- Dragoneer Investment Group: 10.75 million shares. Dragoneer purchased 557,300 shares during Q3.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
