Peloton is one of the few companies that has benefited widely from the unprecedented global health crisis that has forced many people to stay home.
Peloton Interactive (NASDAQ:PTON) saw its shares slide as the investment banking company Morgan Stanley (NYSE:MS) highlighted reduced traffic to the exercise equipment maker’s website. Morgan Stanley analyst Lauren Schenk wrote in a research note that web traffic for Peloton dropped nearly 27% YoY in its fiscal Q3. In relation to the web traffic news, Peloton closed down 11.23% at $10.20. The company continued its decline in an extended trading session, falling 0.20% to $10.18. Data shows that PTON has shed over 57% over the past year and 8.11% over the past three months. Furthermore, the American exercise equipment company is down 10.60% over the past five days, down 4% over the past month.
Peloton experiences a huge drop in web traffic
According to the analyst, the recent quarterly web traffic decline is the steepest since Peloton opened subscriptions. Significantly made Subscription sales in Q2 FY2023, The company said it “significantly outperformed” its expectations in subscription revenue and total revenue. It attributed the loss to massive reduction in promotional spend as compared to the previous fiscal quarter. However, after the launch of Peloton subscriptions, the US company recorded higher turnover among customers. shank where did it go,
“The company was struggling to maintain the momentum seen during the heavily promoted holiday season. However, web traffic is still above pre-COVID levels, in our view the necessary stability for a return to growth.” Failing to find the , the 2 y/y trend continues to deteriorate.
Equity analysts said the position had put Peloton in a problematic position as it had to choose between lower revenue or lower earnings. Meanwhile, investors are keeping an eye on two numbers. On a brighter note, Schenk believes Peloton will continue to squash its additional net customers despite lower web traffic. Morgan Stanley analysts said the company would exceed its prior guidance of 47,000 to 57,000 net customers added in the fiscal third quarter.
Peloton is one of the few companies that has benefited widely from the unprecedented global health crisis that has forced many people to stay home. During the pandemic, consumers exercised more at home and bought more of the company’s bikes and workout apps. However, Peloton’s management did not envisage weaker web traffic or lower sales, believing that pandemic congestion would become the norm. hence. They bought a lot of inventory, which they now sell at a loss. Peloton relies heavily on its subscription businesses, and dwindling web traffic will impact the company significantly.
The investment banking company maintained Peloton Interactive at equal weight and a price target of $4.50.
Ibukun is a crypto/finance writer interested in delivering relevant information using non-complicated words to reach all types of audiences. Apart from writing, she enjoys watching movies, cooking and exploring restaurants in the city of Lagos where she lives.
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