Why Peloton Stock Is Down By 30% Today

Peloton Stock Dives After Company Cuts Full-Year Guidance

Shares of Peloton found themselves under strong pressure after the company released its quarterly results. Peloton reported revenue of $805.2 million and loss of $1.25 per share, missing analyst estimates on both earnings and revenue.

The company has also cut its full-year fiscal 2022 revenue guidance to $4.4 billion – $4.8 billion. In fiscal 2022, the company expects to reach 3.35 million – 3.45 million Connected Fitness Subscriptions.

Not surprisingly, analysts rushed to downgrade the stock after the company missed estimates and provided disappointing guidance. The influx of analyst downgrades put additional pressure on Peloton stock and pushed it from the $85 level towards the $60 level.

What’s Next For Peloton Stock?

Peloton stock, which reached all-time high levels near $170 at the beginning of the year, keeps moving lower as the company releases one bad news after another.

This year, Peloton had to recall its treadmills after reports of injuries and death. After this, Peloton cut the price of its bike to boost sales, which was interpreted as a sign of slower growth by many traders.

The cut in full-year guidance highlights the problem with growth. The situation with coronavirus stabilized, and potential customers look ready to choose fitness options outside their homes, which is bearish for Peloton.

Meanwhile, Peloton stock continues to trade at a rather rich valuation despite the huge pullback in 2021. Analysts expect that the company will report a loss of $2.17 per share in fiscal 2022 and a loss of $0.52 per share in fiscal 2023. It should be noted that earnings estimates have moved lower in recent months, and analysts will have to adjust their estimates after the disappointing quarterly report.

Peloton stock is down by about 65% from its peak, which may attract speculative traders. However, traders have to keep in mind that the story of fast growth looks broken, which is usually very bearish for momentum-dependent stocks like Peloton. At this point, it looks that the company will have to come up with positive catalysts to break the current downside trend of its shares.

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