Peloton: Down 80% In 6 Months, But Don't Buy This Dip, Avoid

Summary

  • Peloton's stock is down 80% in 6 months. As I've been arguing consistently, avoid this name.
  • Peloton doesn't just burn calories. It also burns through cash. A lot of cash. In fact, it burns 79 cents of free cash flow for every $1 of revenue.
  • Peloton is a stock that I've declared to be overvalued and with potential shareholder dilution on the cards. Yesterday, JPMorgan and Goldman Sachs sourced Peloton with much-needed cash.
  • By my estimates, Peloton will need to dilute shareholders within 3 quarters.
  • As always, happy to discuss my thesis further in the comments section.
  • Looking for a helping hand in the market? Members of Deep Value Returns get exclusive ideas and guidance to navigate any climate. Learn More »

A fat man is tired on a simulator in the gym

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Investment Thesis

Peloton Interactive, Inc. (NASDAQ:PTON) reports Q3 2022 results that show that it's burning through a meaningful amount of free cash flow.

For Q3 2022, for every $1 of revenue, Peloton burns through 79 cents of free

Peloton revenue growth rates

Peloton revenue growth rates

Peloton

Peloton's revenue consensus

Peloton Q3 2022 shareholder letter

Peloton Q3 2022 shareholder letter

Author

Author's coverage of Peloton

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