Wednesday’s Headlines: Peloton’s On The Ropes
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Tripadvisor (TRIP) +6.6%
CrowdStrike (CRWD) +5.7%
Spotify (SPOT) +5.0%
Workday (WDAY) +4.2%
Chuy's (CHUY) +3.7%
Moving Down ⬇️
Upstart Holdings (UPST) -56.4%
TrueCar (TRUE) -19.5%
Nautilus (NLS) -7.8%
Prologis Inc. (PLD) -5.3%
1. Shares in Peloton (PTON) slipped a further 9% yesterday, bringing its total losses year-to-date (YTD) to more than 63% — an all-time low of $12.90 per share. This latest loss comes courtesy of a Q1 earnings loss per share of $2.27 v.s. $0.83 expected, on a revenue miss of $964.3 million v.s. $972.9 million anticipated. More alarming is confirmation that net losses accumulated to almost $760 million, v.s. an $8.6 million loss a year ago — it looks like the problems are getting a lot worse before they get better. A steep reduction in consumer demand coming off of the COVID-19 pandemic’s peak and higher-than-anticipated returns of its Tread+ machine were the main culprits blamed for losses by the company. However, it’s going from bad to worse at Peloton, so investors should watch for any plans to change. Read the official press release here.
2. Brace yourselves Netflix (NFLX) users, ads could be coming to our (least?) favorite streaming service as early as this year. According to a report from The New York Times yesterday, Netflix’s CEO Reed Hastings has informed employees that the platform’s lower-priced, ad-supported tier could arrive in Q4 2022. Additionally, Netflix said in the note that it's going to start cracking down on password sharing by the end of this year as well, by charging a fee to users who do so. The two moves come after Netflix lost 200,000 subscribers in its first quarter, which was the company's first subscriber loss in 10 years. Investors will likely welcome these decisions as they represent a chance for Netflix to diversify its revenue intake with minimum expenditure on its own end. Learn more about this story here.
3. Our latest Stock of the Month, The Trade Desk (TTD), reported a mixed bag of results on Tuesday for Q1 that saw shares fall after hours. First, to the good, the advertising technology company topped Q1 estimates with EPS of $0.21 on revenue of $315 million — up 43% year-over-year (YoY). Strong growth in internet TV ad revenue has been a bright spot for the firm, while a partnership with retail giant Walmart also is expected to boost 2022 growth. However, investors balked at TTD’s Q2 revenue forecast of $364 million at the midpoint of guidance. CEO Jeff Green remained optimistic, stating: “We continue to innovate in ways that help marketers succeed, whether it’s launching the world’s most advanced data marketplace that helps advertisers value and price data accurately and use more of it, or our OpenPath solution, which provides advertisers with a more direct path to premium publisher inventory.” Read more here.
Get this week’s full earnings calendar here.