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What's in the Offing for Peloton (PTON) in Q3 Earnings?

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Peloton Interactive, Inc. (PTON - Free Report) is scheduled to report third-quarter fiscal 2020 earnings on May 6, after market close. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 37.5%.

Factors at Play

The coronavirus pandemic is expected to have materially affected Peloton’s performance in the fiscal third quarter. To contain the spread of the deadly virus, the company closed its fitness centers around mid-March and has been operating only through online and digital content. Although the company has been experiencing high entries in its online subscription platform, it may not be able to offset the negative impact of gym closures in the quarter. Also, increase in other operating costs is likely to have weighed on margins in the to-be-reported quarter. The Zacks Consensus Estimate for third-quarter loss is pegged at 17 cents per share.

However, increase in connected fitness subscribers, improved service, partnerships and extensive innovation are likely to have benefitted the top line in the third quarter. Notably, the company expects subscriber count in the range of 843,000-848,000. It also anticipates total revenues in the band of $470 million to $480 million for the to-be-reported quarter.

Peloton Interactive, Inc. Price and EPS Surprise

 

What Our Model Says

Our proven model predicts an earnings beat for Peloton this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. 

Earnings ESP: Peloton has an Earnings ESP of +7.63%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Peloton, which shares space with Clarus Corporation (CLAR - Free Report) , Pool Corporation (POOL - Free Report) and YETI Holdings, Inc. (YETI - Free Report) in the Leisure and Recreation Products industry, carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

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