Peloton (NASDAQ: PTON) Poised for a New All-Time High on the Back of Smashing Q3 2020 Earnings and a String of Upgrades From Cowen (NASDAQ: COWN) and Others

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Peloton (NASDAQ:PTON) – the company that specializes in providing home fitness equipment as well as interactive online classes – has seen its share price rocket higher amid the spatial distancing measures enacted to curb the spread of the coronavirus (COVID-19) pandemic. Following a stellar Q3 2020 earnings report yesterday and the corresponding stock price upgrades from analysts, the indoor fitness brand’s shares seem poised for a fresh zenith.

For the three months that ended on the 31st of March 2020, Peloton reported $524.6 million in revenue, thereby, exceeding consensus expectations by $33.52 million. Crucially, the company’s connected subscribers grew to 866,000 while equipment sales increased by 61 percent on an annual basis to $420.2 million.

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On the back of these stellar numbers, Peloton was able to report an adjusted EBITDA of $23.5 million for the quarter against a guided loss of between -$35 million and -$25 million.

Finally, due to the ongoing spatial distancing dynamics, Peloton became one of just a handful of companies that raised their outlook for the year. As an illustration, the indoor fitness brand now expects to earn between $500 million and $520 million in revenue next quarter against consensus expectations of $381 million. The company also projects a Q4 EBITDA of $55 million to $65 million. Crucially, Peloton has now predicted that its connected subscribers will reach the 1 million mark by the end of Q4 2020.

Echoing the bullish streak emanating from Peloton’s Q3 2020 earnings report, Cowen (NASDAQ:COWN) analyst John Blackledge increased his target for the company’s share price to $50 from the earlier peg at $37, representing an upside potential of 11.36 percent relative to the current pre-market price of $44.90. Blackledge also maintained an ‘Outperform’ rating for the stock. The analyst also noted that the pandemic dynamics along with an improvement in marketing efficiency helped the company in reporting a positive EBITDA print.

Similarly, Stifel (NYSE:SF) analyst Scott Devitt boosted Peloton’s target stock price from $42 to $50 while reiterating a ‘Buy’ rating for the company. Devitt asserted in his investment note that Peloton’s current pickup in demand “is just the beginning”. According to the analyst, the outdoor fitness brand will increase its hardware product offerings beyond bikes and treadmills to match its “unparalleled [online] content”. Moreover, just as the case is with Netflix (NASDAQ:NFLX), Devitt believes that Peloton can outbid its competitors when it comes to the online content due to its already extensive and growing subscriber base. The analyst further noted:

"[Peloton is an] unstoppable juggernaut to be stopped only by way of self-inflicted wound from here."

Peloton’s stock is up over 18 percent in today’s pre-market session, hovering around $44.90 at the time of writing. The stock’s previous high stands at $35.23 and was recorded back in November 2019. Consequently, if the company’s share price opens today at the current level, it will result in a fresh intraday all-time high. Year to date, Peloton’s stock has generated a gain of 27.87 percent (based on Wednesday’s closing price). For reference, the broader S&P 500 index is down 11.83 percent in the same timeframe.