Peloton stock shot up 20% on Wednesday: find out why

Peloton Interactive Inc (NASDAQ: PTON) is up more than 20% this morning after reporting its second-quarter revenue that came in well above the Street estimates.

Peloton stock up on encouraging guidance

Shareholders are celebrating also because the connected fitness company offered upbeat future guidance.

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Peloton now forecasts its revenue to fall between $690 million to $715 million in the current quarter. Analysts, in comparison, had called for $690.5 million in revenue. In a letter to shareholders, CEO Barry McCarthy said:

If you’ve been wondering whether or not Peloton can make an epic comeback, this quarter’s results show the changes we’re making are working. This was by far our best quarterly performance in my 12 months with Peloton.

The fitness equipment company expects $35 million to $50 million of adjusted EBITDA loss in Q3 – also slightly better than $44 million that experts had anticipated.

Peloton is improving its free cash flow

FactSet consensus was for a negative free-cash flow of $149 million this quarter. But Peloton surprised on that front as well with a much better $94 million of negative free cash flow. CEO McCarthy added:

Strip out the costs of paying suppliers to settle obligations for parts we don’t need, and we generated positive free cash flow of approximately $8.0 million in the second quarter.

Late last year, Peloton partnered with Hilton Worldwide as Invezz reported HERE. For the year, the Peloton stock is now up a whopping 90%.

Notable figures in Peloton’s Q2 earnings report

• Lost $335.4 million versus the year-ago $439.4 million
• Per-share loss also narrowed from $1.39 to 98 cents
• Revenue tanked 30% year-over-year to $792.7 million
• Consensus was 66 cents loss on $709.8 million revenue
• Number of members was roughly the same versus last year

According to Peloton Interactive Inc, it brought in less revenue this quarter from hardware sales and more from subscriptions up 10% year-on-year. Wall Street currently has a consensus “overweight” rating on Peloton stock.