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Factors Setting the Tone for Peloton's (PTON) Q2 Earnings

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Peloton Interactive, Inc. (PTON - Free Report) is scheduled to report fiscal second-quarter 2020 earnings on Feb 5. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 258.3%.

Factors at Play

Increase in connected fitness subscriber, low churn rate, improved service, partnerships and extensive innovation are likely to have driven the company’s fiscal second-quarter top line. Notably, the company expects subscriber count to be in the range of 680,000-685,000, suggesting 88% growth at the midpoint. It also anticipates total revenues to be around $410 million to $420 million, indicating 58% growth.

The company’s consistent focus on expansions, various sales-building initiatives and increase in the global guest count is likely to have contributed to its comparable sales (comps) in the to-be-reported quarter. However, higher operating expenses might have negatively impacted its profit.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Peloton Interactive this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

The company has an Earnings ESP of -4.62% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks Poised to Beat Estimates

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Cable One, Inc. (CABO - Free Report) has a Zacks Rank #1 and an Earnings ESP of +3.89%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Deckers Outdoor Corporation (DECK - Free Report) has an Earnings ESP of +3.14% and a Zacks Rank #1.

WW International, Inc. (WW - Free Report) has an Earnings ESP of +13.98% and a Zacks Rank #2.

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