Did Business Growth Power Peloton Interactive's (NASDAQ:PTON) Share Price Gain of 167%?
Peloton Interactive, Inc. (NASDAQ:PTON) shareholders might understandably be very concerned that the share price has dropped 34% in the last quarter. But that doesn't detract from the splendid returns of the last year. Like an eagle, the share price soared 167% in that time. So we think most shareholders won't be too upset about the recent fall. The real question is whether the business is trending in the right direction.
Check out our latest analysis for Peloton Interactive
We don't think that Peloton Interactive's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
Over the last twelve months, Peloton Interactive's revenue grew by 139%. That's stonking growth even when compared to other loss-making stocks. Meanwhile, the market has paid attention, sending the share price soaring 167% in response. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Peloton Interactive is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think Peloton Interactive will earn in the future (free analyst consensus estimates)
A Different Perspective
Peloton Interactive shareholders should be happy with the total gain of 167% over the last twelve months. Unfortunately the share price is down 34% over the last quarter. Shorter term share price moves often don't signify much about the business itself. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Peloton Interactive is showing 3 warning signs in our investment analysis, you should know about...
If you are like me, then you will not want to miss this freelist of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
