Options Traders, Analysts Blast Peloton Stock After Earnings

No less than three bear notes were dished out following earnings

Deputy Editor
Aug 27, 2021 at 10:14 AM
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Peloton Interactive Inc (NASDAQ: PTON) stepped into the earnings confessional after the close yesterday, where the fitness equipment maker turned in wider-than-expected fiscal fourth-quarter losses per share, though revenue was well above Wall Street's expectations. Despite the revenue beat, the company issued a disappointing first-quarter revenue outlook, as paid digital subscriptions taper off and it faces increased costs associated with its recent bike recall. In separate news, Peloton was subpoenaed by the government today, with a U.S. Securities and Exchange Commission (SEC) filing indicating the company may have mishandled the reporting of injuries caused by its products.

Peloton stock is plummeting in response to the deluge of updates, last seen down 8.3% to trade at $104.67. That move is slightly below the post-earnings move the options pits were pricing in. On the charts, Peloton stock is heading for its first close below the $106 level since mid June, and is grappling with the ascending 320-day moving average. Now down 30.5% in 2021, PTON is set to lock in its fifth-straight weekly loss. 

Analysts were quick to respond to today's news. In fact, at least three firms cut their price target on PTON, including Wedbush, who slashed its target all the way down to $107 from $115. Conversely, Evercore ISI hit the equity with a bull note, raising its price target to $108 from $104.57. Coming into today, most analysts were bullish, with 18 of the 23 in coverage calling it a "buy" or better. Plus, the 12-month consensus price target of $135.19 is a 23.1% premium to last night's close.

Options traders are coming out of the woodwork today as well. In the first hour of trading, 56,000 puts and 43,000 calls have crossed the tape, which is 16 times the intraday average. Most popular is the weekly 8/27 100-strike put, followed closely by the October 140 call. 



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