Yahoo Finance Amidst increasing losses, Investors bid up Peloton Interactive (NASDAQ:PTON) 34% this past week
Over the last month the Peloton Interactive, Inc. (NASDAQ:PTON) has been much stronger than before, rebounding by 92%. But that doesn't help the fact that the three year return is less impressive. After all, the share price is down 39% in the last three years, significantly under-performing the market.
While the stock has risen 34% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
View our latest analysis for Peloton Interactive
Peloton Interactive wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years, Peloton Interactive saw its revenue grow by 25% per year, compound. That's well above most other pre-profit companies. While its revenue increased, the share price dropped at a rate of 12% per year. That seems like an unlucky result for holders. It's possible that the prior share price assumed unrealistically high future growth. Before considering a purchase, investors should consider how quickly expenses are growing, relative to revenue.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Peloton Interactive is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.
A Different Perspective
The last twelve months weren't great for Peloton Interactive shares, which performed worse than the market, costing holders 31%. Meanwhile, the broader market slid about 7.0%, likely weighing on the stock. Shareholders have lost 12% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. It's always interesting to track share price performance over the longer term. But to understand Peloton Interactive better, we need to consider many other factors. Even so, be aware that Peloton Interactive is showing 4 warning signs in our investment analysis , you should know about...
But note: Peloton Interactive may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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