Quarterly Miss Casts Shadow on Peloton's Strong Forecast

PTON Is trading at its lowest level since November

Digital Content Manager
May 4, 2023 at 10:04 AM
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Peloton Interactive Inc (NASDAQ:PTON) stock is backpedaling this morning, last seen down at 14.8% at $7.53. The fitness equipment maker earlier shared wider-than-expected third-quarter losses of 79 cents per share, though revenue bested Wall Street's estimates. The company is also brushing off a strong fourth-quarter revenue forecast, as it bets an expansion to to third-party sales channels will aid its recovery. 

The equity is set to lose support from the $8.50 level if these losses hold, and is trading at its lowest level since November. The 40-day moving average has been pressuring shares lower since March, after rejecting rallies throughout April. Year-over-year, PTON has shed nearly 60%.

Options traders are firmly bearish toward Peloton stock, per its 50-day put/call volume ratio of 1.68 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than all readings from the past 12 months. 

Drilling down to today's options activity, 11,000 calls and 7,186 puts have crossed the tape, which is five times the intraday average. Most popular by far is the weekly 5/5 7-strike put.

It's also worth noting short sellers have the upper hand. The 34.06 million shares sold short make up 11.1% of the stock's available float, or nearly three days' worth of pent-up buying power. 

 

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