Taking on analysts’ expectations and winning: Peloton Interactive Inc. (PTON)

Peloton Interactive Inc. (NASDAQ: PTON) stock jumped 5.94% on Friday to $11.06 against a previous-day closing price of $10.44. With 7.97 million shares changed hands, the volume of the stock remained lighter than its average volume of 12.56 million shares. During the session, the Leisure company that operates in wider Consumer Cyclical sector, reached to the highest price of $11.09 whereas the lowest price it dropped to was $10.46. The 52-week range on PTON shows that it touched its highest point at $40.35 and its lowest point at $6.66 during that stretch. It currently has a 1-year price target of $13.47. Beta for the stock currently stands at 1.79.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of PTON was down-trending over the past week, with a drop of -0.36%, but this was up by 5.53% over a month. Three-month performance surged to 49.66% while six-month performance fell -1.78%. The stock lost -65.26% in the past year, while it has gained 39.29% so far this year. A look at the trailing 12-month EPS for PTON yields -8.57 with Next year EPS estimates of -1.04. For the next quarter, that number is -0.65. This implies an EPS growth rate of 70.00% for this year and 60.30% for next year.

Float and Shares Shorts:

At present, 339.01 million PTON shares are outstanding with a float of 310.65 million shares on hand for trading. On Oct 13, 2022, short shares totaled 41.93 million, which was 12.39% higher than short shares on Sep 14, 2022. In addition to Mr. Thomas Cortese as the firm’s Co-Founder & Chief Product Officer, Mr. W. Barry McCarthy Jr. serves as its CEO, Pres & Director.


Institutional Ownership:

Through their ownership of 85.15% of PTON’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 7.49% of PTON, in contrast to 43.94% held by mutual funds. Shares owned by individuals account for 30.81%. As the largest shareholder in PTON with 15.46% of the stake, T. Rowe Price Associates, Inc. holds 48,467,324 shares worth 48,467,324. A second-largest stockholder of PTON, The Vanguard Group, Inc., holds 24,917,165 shares, controlling over 7.95% of the firm’s shares. Morgan Stanley Investment Managem is the third largest shareholder in PTON, holding 18,092,393 shares or 5.77% stake. With a 5.84% stake in PTON, the American Funds Growth Fund of Ame is the largest stakeholder. A total of 18,318,027 shares are owned by the mutual fund manager. The T Rowe Price Growth Stock Fund, which owns about 4.02% of PTON stock, is the second-largest Mutual Fund holder. It holds 12,590,061 shares valued at 99.97 million. Vanguard Total Stock Market Index holds 2.91% of the stake in PTON, owning 9,136,928 shares worth 72.55 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for PTON since 31 analysts follow the stock currently. There are 11 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 15 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With PTON analysts setting a high price target of $20.00 and a low target of $4.50, the average target price over the next 12 months is $12.56. Based on these targets, PTON could surge 80.83% to reach the target high and fall by -59.31% to reach the target low. Reaching the average price target will result in a growth of 13.56% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. PTON will report FY 2023 earnings on 08/24/2023. Analysts have provided yearly estimates in a range of -$1.72 being high and -$3.49 being low. For PTON, this leads to a yearly average estimate of -$2.55. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Peloton Interactive Inc. surprised analysts by -$0.53 when it reported -$1.20 EPS against a consensus estimate of -$0.67. The surprise factor in the prior quarter was -$2.92. Based on analyst estimates, the high estimate for the next quarter is -$0.44 and the low estimate is -$1.01. The average estimate for the next quarter is thus -$0.66.

Summary of Insider Activity:

Insiders traded PTON stock several times over the past three months with 4 Buys and 3 Sells. In these transactions, 70,488 shares were bought while 27,732 shares were sold. The number of buy transactions has increased to 33 while that of sell transactions has risen to 12 over the past year. The total number of shares bought during that period was 164,390 while 63,277 shares were sold.

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