Peloton Interactive (PTON) stock is volatile Thursday as market participants take in the exercise equipment maker's fiscal third-quarter earnings report. The company also announced a change in the C-suite and a restructuring plan that will eliminate 15% of its workforce.
Starting with earnings. In the three months ended March 31, Peloton's revenue decreased 4.2% year-over-year to $717.7 million while its per-share loss narrowed to 45 cents from 79 cents.
The results came up short of analysts' expectations. According to Yahoo Finance, Wall Street was expecting revenue of $723.2 million and a loss of 37 cents per share.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
While the quarterly results were not great, the sentiment toward PTON stock briefly turned positive when Peloton unveiled a leadership change and a restructuring plan.
Specifically, the company announced that Barry McCarthy, who had been CEO since February 2022, is stepping down from the role, effective immediately. Karen Boone and Chris Bruzzo, two Peloton board members, will serve as interim co-CEOs as the board searches for a permanent replacement for McCarthy.
The company also said it will cut its global headcount by approximately 15%, or roughly 400 employees, reduce its retail showroom footprint and will "reimagine" its international go-to-market strategy to be more efficient.
"This restructuring will position Peloton for sustained, positive free cash flow, while enabling the company to continue to invest in software, hardware and content innovation, improvements to its member support experience, and optimizations to marketing efforts to scale the business," the company said in a statement.
As a result of its weak performance in the first nine months of its fiscal year and a historically "challenging" fourth quarter, Peloton lowered its full-year revenue outlook. The company now expects revenue in the range of $2.675 billion to $2.7 billion, which represents a decline of about 4% from fiscal 2023 at the midpoint of its range.
Is Peloton a buy, sell or hold?
Wall Street is sitting on the sidelines when it comes to Peloton stock. According to S&P Global Market Intelligence, the consensus analyst target price for PTON stock is $5.82, representing implied upside of more than 62% to current levels. However, the consensus recommendation is Hold.
Outside of the analyst community, it is vital that investors understand that while Peloton is a cheap stock to buy, it's also extremely volatile. In McCarthy's tenure as CEO, shares lost nearly 90% of their value.
And following news of his departure, the job cuts and earnings, PTON stock jumped 18% out of the gate but was last seen down 10%.
Related Content
-
Harris Proposes Medicare Cover In-Home HealthcareVice President Kamala Harris proposed a plan for Medicare to cover in-home healthcare.
-
Meta and Microsoft Highlight Big Questions for AR’s FutureThe Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
-
Want to Turn Your Tax Bill Into a Refund? What to Do NowA few easy steps can help you avoid writing a check to the IRS. And if your most recent refund was a whopper, you might want to consider a few adjustments.
-
FTC Cracks Down: Fake Reviews Officially a No-NoCompanies can no longer buy and post online reviews that aren't by actual customers — and there's a hefty fine involved. Here's what to watch for.
-
Stock Market Today: Tech Leads Stocks to Broad-Based GainsRisk appetite came back with a vengeance as oil and bonds took a breather.
-
Election Could Reshape Opportunity Zones and 1031 ExchangesTrump and Harris have divergent approaches to qualified opportunity zones and 1031 exchanges. See how each could fare under their administrations.
-
Six Reasons to Have Life InsuranceThe peace of mind from knowing your family is financially protected if something happens to you is invaluable, but there are other compelling reasons, too.
-
Farewell Paper I-Bonds: Savings Bonds Are Going Online-OnlyThe last remaining way to buy a paper savings bond in the U.S. (with your income tax refund) won't be available from January 2025. Tax filers will still be able to buy I-bonds online, however.
-
Is Medicare a Good Reason to Wait Until 65 to Retire?The average retirement age is 62, but many people wait until Medicare starts at 65. Should health care be the key driver of your retirement date?
-
Late to Retirement Planning? Four Ways to Help Catch UpIf you're afraid you're behind in saving for retirement, it's important to act. You can do something. Here are four ways to help get back on track.
