Peloton Interactive (PTON) shares surged to a fresh record high Thursday after the popular home fitness group boosted its full-year sales guidance as coronavirus lockdowns triggered a surge in new subscribers.
Peloton, which listed on the Nasdaq in late September, posted a wider-than-expected third-quarter loss of 20 cents per share but saw overall revenues rise 66% from last year to a Street-beating $524.6 million.
With gyms around the country closed, and millions of people staying at home amid 'shelter-in-place' orders, users of its 'connected fitness' program nearly doubled to just over 886,000 and total members rose to 2.6 million. Sales of its eponymous stationary bicycle, as well as other fitness gear, rose 61% to $420.2 million.
Looking into the 2020 financial year, Peloton said it sees sales for the three months ending in June, its fiscal fourth quarter, in the range of $500 to $520 million, with a full-year outlook of between $1.72 billion and $1.74 billion.
"As you might imagine, however, the shelter-in-place and work from home realities have created a meaningful tailwind for Peloton and a broader ongoing consumer shift towards that home fitness experiences," CEO John Foley told investors on a conference call last Wednesday.
"While this tailwind is undeniably positive for our business financially, we are more proud of our member growth, the increased engagement of our members on our platforms, and the feedback we've received from our members about how Peloton has helped them maintain their physical and mental well-being in these difficult times."
Peloton shares were marked 19.2% higher in early trading Thursday to hit a fresh all-time high of indicate an opening bell price of $45.31 each, a move that would extend the stock's year-to-date gain to around 60% and value the New York-based group at around $12.7 billion.
Connected fitness subscribers, Peloton said, would likely rise past 1 million for the full 2020 financial year, up from its prior forecast of between 920,000 and 930,000.
"In a post-COVID-19 world, we remain confident around the secular shift toward fitness at-home," said KeyBanc Capital Markets analyst Edward Yruma, who boosted his price target by $10, to $55 per share, with an overweight rating following last night's earnings.
"The increase in subscriber signups and engagement per sub reinforces our thesis that fitness at-home will remain a compelling alternative to a gym membership. Peloton continues to aggressively add programming (even broadcasting from home) in an effort to broaden the fitness use cases for the Peloton service," he added.