Peloton Soars 10% In After-Hours On First-Ever Quarterly Profit

Shares of Peloton Interactive jumped 9.7% in Thursday’s extended trading session as the company surprised investors with its first-ever quarterly profit. The fitness product maker’s posted earnings of $0.27 per share after the year-ago quarter’s loss per share of $2.07. Analysts had expected EPS of $0.15.

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Peloton’s (PTON) revenues almost tripled to $607.1 million from $223.3 million in the year-ago quarter, surpassing analysts’ estimates of $586.2 million. The company is benefiting from a spike in demand for fitness products and services as consumers look to stay fit and healthy amid COVID-19 pandemic-led stay-at-home directives.

Peloton provided a better-than-expected outlook for 1Q and fiscal 2021. For 1Q, the company projects revenues between $720 million and $730 million, compared with the Street consensus of $458.7 million. Its fiscal 2021 sales guidance range of $3.50-$3.65 billion exceeded analysts’ estimates of $2.66 billion. (See PTON stock analysis on TipRanks).

On September 9, Goldman Sachs analyst Heath Terry raised the stock’s price target to $110 (25.3% upside potential) from $96 and reiterated a Buy rating following the company’s earlier-than-expected launch of two new hardware products. Terry noted that the move will allow Peloton to capitalize on current demand for its products and a growing digital audience base. He also believes that the company’s products will continue to gain traction amid the ongoing uncertainty over out-of-home fitness options.

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 16 Buys and 2 Holds. With shares up nearly 209% year-to-date, the average price target of $84.38 now implies downside potential of about 3.8% to current levels.