PTON
Peloton Interactive Inc - Ordinary Shares - Class A
Consumer, TMT
08/30/2021
Presented
| Date | 08/25/2021 |
| Price | $116.25 |
| Market Cap | $34.68B |
| Ent Value | $32.01B |
| P/E Ratio | 185.82x |
| Book Value | $6.69 |
| Div Yield | 0% |
| Shares O/S | 298.29M |
| Ave Daily Vol | 6,730,858 |
| Short Int | 8.49% |
Current
| Price | $5.21 |
| Market Cap | $1.96B |
| Peloton Interactive, Inc. operates at-home fitness platform for live and on-demand indoor cycling classes. The company pioneered connected, technology-enabled fitness, and the streaming of immersive, instructor-led boutique classes for its Members. It operates through three reportable segments: Connected Fitness Products, Subscription and Other. The Connected Fitness Product segment consists of sales of bike, tread & related accessories. The Subscription segment involves in the monthly subscription and credits from live studio classes. The Other segment consists of boutique and apparel sales. The Peloton Interactive was founded on by John Foley, Graham Stanton, Thomas Cortese, Yony Feng and Hisao Kushi in 2012 and is headquartered in New York, NY. |
Publicly traded companies mentioned herein: Jefferies Financial Group Inc (JEF), Peloton Interactive Inc (PTON)
Highlights
The presenter is long shares of Peloton Interactive Inc (PTON) on the basis that PTON will materially beat consensus expectations over the next twelve months. PTON is a controversial stock, with bears highlighting recent trends in net adds and gross orders. However, for companies that have hardware components, the best time to buy the stock is going into product cycles. PTON could have two product cycles in the next twelve months: the company announced this week that the lower-priced treadmill will be released on August 30 in the US, Canada, and the UK; management has also mentioned on past calls that it is pursuing rowing and strength opportunities and is uncertain whether this would come in the form of hardware products or content-only offerings. The tread market is larger than the bike market, and the coming holiday season could be extremely strong with PTON’s ability to increase marketing spend given its recently improved inventory/supply chain position. Based on a SOTP analysis assuming $3.5B of subscription gross profits in calendar-year 2025 (vs. fiscal-year 2021 subscription gross profits of $541.7MM), a 20x gross profit multiple on the subscription business, and a 1x revenue multiple on CY2025 product sales of $8B – $9B (vs. FY2021 product sales of $3.1B), there is upside to a $250+ share price from the current $114.
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