Should You Invest in Peloton Stock? | Stock Analysis of PTON

Should You Invest in Peloton Stock? | Stock Analysis of PTON

what is up you guys it is ike here and in today’s video i’m bringing another stock analysis and this one guys is a peloton interactive ink ticker symbol pto on piton and guys this is a company that is a fitness social media sort of aspect where they have their bikes and they have subscriptions people paid to have instructors they can compete against other peloton subscribers and it’s a really interesting business model and i just kind of want to take a look here at stock went down today so i want to go through and see why it went down talk about it is this a good time to buy this stock and of course always drop a like and subscribe if you find this information at all helpful and please bear in mind not a financial advisor so do your own research before investing so let’s go ahead and take a look here at peloton down eight percent eight and a half percent today definitely took a nice little dip today it is uh down from a city to week high of 171 dollars and up from a fifth-week low of 68.06 over the past five days down one point two percent past month down fourteen percent and then past six months down fifteen percent not as bad as it did get back down here in may we had it dipped down to the 80s year to date down 28 past year you can see from the high point to now down over 37 so this might be an interesting company to start looking to invest in and i always like seeing companies that are down let’s take a look here at their earnings call uh their their revenue did beat but the earnings per share missed by 74 percent and that really caused them to have their price drop and so it’s kind of an interesting reas reason why is just because of the one earnings but apparently shareholders freaked out and so that was a cause of concern but let’s go ahead and take here a look on hyper charts i really like it so if you guys don’t know peloton has a market cap of 31 billion pe ratio of 155 so and let’s see let’s just let’s just take a look here at hyper charts then year over year revenue growth of 54 that’s pretty good you can see this is a nice chart to see the fitness subscribers you can see how it’s gone from 116 169 000 back in 2018 to now over three 2.3 subscribers so it’s growing and 2.3 million is really not that many when you consider let’s see here how many uh we’ll go 18 to 40 uh year olds in the us let’s see over 281 million so they only have uh two percent of the are one percent of the entire uh population that’s eligible for this type of uh subscription basis so they have plenty of room to grow into the market share for sure you can see their revenue uh segments they had a dip here in revenue in cube their most recent quarter the end of the year quarter for them and that was why shares sold off and we had this continual growth and then boom it goes down one so that is definitely it was a cause of concern for them is why the stock price went down you can see their revenue uh went down from 1.2 billion to 936 million their gross profit also dropped from 444 million to 253 million and they took a dip their operating income down 301 million dollars in operating income so they had those three good quarters where they made some money because of covid and then ever since then it seems like uh since 2020 they’ve kind of just took a nosedive and they took a pig dive here in q4 which is definitely why the shares dropped so much today you can see their gross margins and operating margins and their profit margins all tanking like crazy down 32 over year their expenses shooting up through the roof definitely not good you can see their growth really just taking a dive and the outstanding shares did increase substantially so over three around around 300 million shares out on the market so definitely uh some things to be kind of concerned about but if you look at the overall business model it’s really good so like they have you can get the bike the treadmill they have the peloton app where you can try different classes cardio all this stuff you can buy bikes you can buy treadmills they have the apps accessories uh apparel they got all sorts of stuff i mean you look at the different types of things you can do you can do cycling running strength yoga boot camp cardio meditation outdoor stretching walking cycling so definitely a lot to choose from and probably many different instructors for each one and let’s see so they want you to compare your cost to like a gym or something that you do for exercise to a peloton you can see how much you would save you can see that the bikes start at 1400 which honestly is not that bad for an exercise bike or you could pay monthly just 39 and you get the all access membership oh all the all access membership and accessories are separate so you have to buy that too very interesting you get 30 days of classes free if you use your phone you can just get the app and do non-bike type of activities you can do it on your smart tv or you can do it on your phone you can just do that use the app which is also a growing revenue segment they got the new peloton tread coming out uh huh very interesting they have lots of uh just different articles basically they’re giving you the options to try things for for free for 30 days to see if you really like it and 30 days is plenty of time to try out a new product or service for free i i think so so let’s go ahead and take a look here at some of the financials this is from their annual report you can see fitness subscribe subscriptions 2.3 million like we’d said up from 1 million so basically doubled year over year not bad uh average net monthly connected fitness churn 0.62 total workouts in the millions 459 million compared to last year of 164 million so i’ve been having good growth all right uh average monthly workouts per connected fitness subscription 22 million up from 17.9 million uh subscription gross profit 541 million dollars contributions 586 million margins of 62 percent that’s really good because it is a subscription-based model which is makes it very easy to expand upon and to grow that side of the business so definitely that right there the business model for peloton is excellent excellent business idea it’s a subscription based uh service people uh they have their obviously their workers and their film crews and stuff like that they have but i mean if you think about how they’re able to to grow the business by just having more people download the app or buy their products definitely very easy to expand and to compound this business and it has that sticky business model being a subscription so people pay monthly so you have that constant cash flow coming in which allows you to continue to make your services uh even better and more entertaining and helpful for people uh let’s see here uh-huh revenue from fitness products 3.1 million compared to last year 1.4 million so up substantially uh subscriptions 872 million from 363 million total revenue um for that that’s the money they got from the scripture they got 872 million from subscriptions and 3.1 uh billion from the products themselves so obviously what i expect is this these two numbers to uh kind of cross over where eventually their products will probably decline some and we’ll see the subscriptions go up because as they get more and more subscribers remember they only have like two million total subscribers monthly subscribers so uh this is definitely a company that can expand on those subscribers which will mean more revenue coming in and will probably eventually cross over and surpass the fitness products that they are selling uh we can see gross profit uh 1.4 billion sales then you can see their expenses are in sales and marketing a general administrative uh net loss 189 million dollars compared to 71 million and 195. so kind of not great with the mist there but what are you gonna do it’s kind of crazy times for sure uh cost of revenue and it’s not really hmm so you can see how they’ve increased the cost of the subscription which is good to see uh from 1999 to now 21 70 for for subscriptions and you can see how the revenue from the subscriptions look at this it’s pretty much uh at least doubled every single year you have it go from 139 million to 363 million into now 872 million in money coming in so you can imagine that next year they could easily pass the one billion dollar outlook i would be very shocked if this had a subscription revenue of less than 1.5 billion dollars just based on the growth trends just looking at it very quickly and easily definitely makes me think that they’re going to have a lot more revenue and you can see the revenue up 120 percent so very very good to see that for sure uh cost of revenue no let’s see aha net losses no that’s not what i wanted where is the page here we go this is the other part of the page i want to look at cash and cash equivalents 1.13 billion dollars in cash and we can see long term where’s long term debt so that’s not very helpful i can’t find any long-term debt lessons looked at uh total assets of 4.4 billion uh total liabilities of 2.7 billion so definitely they have more uh assets than liabilities which is always good to see you always want a company to invest in companies that are have more assets than liabilities and right now so the revenues are not what you want it to be when it comes to peloton people are obviously nervous about that which is why the stock declined so much but if you believe in the business model long term well then you should want to own this business and be excited when there’s these dips in the stock price and you can go in and buy more so peloton being down eight percent honestly uh is an interesting uh idea honestly if you’re gonna hold this company for the next five ten years i would see no problem buying it at this price i would prefer to get it uh into the low 90s preferably under 90 would be even better but at 104 dollars it’s not the worst pr stock price for peloton at all i really do like the business model i think it’s a phenomenal business model honestly it’s it’s a really good subscription based business that’s gonna be able to grow that subscription revenue so definitely a company i’m gonna keep my eyes on again i if you guys have been following me for any time you know i’m primarily a dividend investor but i do like doing some growth investing on the side it kind of helps wet my appetite and keep me excited and into the markets because sometimes dividend investing can get a little uh dull or boring but i do like peloton i do think that’s an interesting stock price for sure well thank you guys so much for watching this video and thank you guys all who have subscribed i’m trying to get to 300 subscribers by the end of this month and we uh don’t have very much time left it’s uh end of the month is next tuesday and we’re at 262 subscribers so if you appreciate this video i would really appreciate you guys if you would like and subscribe thank you guys again so much i will see you next monday because today is friday is the end of the week so we’ll see you guys on monday have a wonderful safe weekend guys and please make sure you always like
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Should You Invest in Peloton Stock? | Stock Analysis of PTON

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