Peloton, a trendy home-exercise company, has been performing exceptionally well throughout the pandemic, as many have replaced their 20 minute drive to the YMCA with a 15 second walk to their respective equipment at home. And despite initially giving an optimistic 12-month target price at $84/share, Goldman Sachs upped the ante this morning, reiterating their Buy rating and raising their price target to a bullish $96/share.
The optimism displayed by Goldman Sachs is grounded not only on public opinion, but also by Peloton’s financials. With any given company in the Consumer & Retail industry, advertising is imperative in getting consumers to engage with products. However, Peloton seems to spend close to nothing in material marketing, yet has seen their best relative quarter in existence, as we’ve seen with the company’s doubling of production and weeks long order of consistent backlog.
From an investor’s standpoint, it’s impossible to confidently say the share price will rise 43% post-earnings. But given the information provided by various banks, coupled with the attractive financials of the fitness company, it’s safe to say there’s little uncertainty that Peloton will beat expectations when they report earnings September 10th.
Though we don’t know how well the versatile exercise company will report on Earnings Day, we have strong convictions that they’ll outperform. The analysts at Goldman Sachs have derived a forecast for their Peloton valuation, and expect 208K net adds and adjusted EBITDA of $630.2M, as compared to the consensus of 199K and $577.4M, respectively. More so, these EBITDA forecasts may even be slightly conservative, as we may also see, “considerable upside to our EBITDA expectations given the lack of marketing spend in the quarter,” according to the Equity Research Team at Goldman Sachs.
Disclaimer: At the time of publication, we have no positions in any of the securities mentioned in this article. We wrote this article ourselves, and it expresses our own opinions. We are not receiving compensation for creating this article (other than from TheStreet) and have no business relationship with any company whose stock is mentioned in this article.