Stock Market Today, Feb. 5: Peloton Slides After Revenue Miss and Weak Guidance
Peloton Interactive (NASDAQ:PTON), provides internet-connected fitness equipment with live and on-demand classes, closed Thursday at $4.39, down 25.72%. The stock slid after Q2 results missed expectations and Q3 guidance disappointed. Investors are watching subscription trends and leadership changes. Trading volume reached 90.3 million shares, about 728% above its three-month average of 10.9 million shares. Peloton Interactive IPO'd in 2019 and has fallen 83% since going public.
How the markets moved today
S&P 500 fell 1.20% to 6,800, while the Nasdaq Composite lost 1.59% to close at 22,541. Among connected fitness equipment and subscription-based fitness services peers, Lululemon Athletica closed at $170.09, down 4.44%.
What this means for investors
It was a rough Q2 earnings report all around for Peloton. Sales slid 3% and earnings turned negative again -- both missing Wall Street’s estimates. Making matters worse, management’s guidance for $2.42 billion of sales in 2026 also came up shy of consensus at $2.48 billion, and the company announced its CFO would be leaving after four years with the company.
That said, Peloton’s gross margins rose 320 basis points, and it continued to generate cash, with a FCF margin of 11%. Furthermore, its commercial business (sales to gyms, hotels, apartments, etc.) grew by 10%, and Peloton’s 10 microstores generated 8 times higher sales per square foot than legacy stores, suggesting the potential for an eventual sales rebound. Peloton is an intriguing turnaround story at just 0.7 times sales, but I’d prefer to see some sales growth momentum before buying.
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Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc. and Peloton Interactive. The Motley Fool has a disclosure policy.
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