Peloton Interactive, Inc. Fundamental Analysis (NASDAQ: PTON)
Peloton Interactive, Inc. (NASDAQ: PTON) shows weak financial fundamentals with a PE ratio of 39.03, profit margin of 2.58%, and ROE of -20.60%. The company generates $2.3B in annual revenue with weak year-over-year growth of -7.77%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 127.3/100 based on profitability, valuation, growth, and balance sheet metrics. The A grade reflects excellent fundamentals and strong overall stability.
Fundamental Health Score
We analyze PTON's fundamental strength across five key dimensions:
Efficiency Score
WeakPTON struggles to generate sufficient returns from assets.
Valuation Score
ModeratePTON shows balanced valuation metrics.
Growth Score
ModeratePTON shows steady but slowing expansion.
Financial Health Score
ExcellentPTON maintains a strong and stable balance sheet.
Profitability Score
WeakPTON struggles to sustain strong margins.
Key Financial Metrics
Is PTON Expensive or Cheap?
P/E Ratio
PTON trades at 39.03 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, PTON's PEG of 0.04 indicates potential undervaluation.
Price to Book
The market values Peloton Interactive, Inc. at -17.42 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 2.84 times EBITDA. This is generally considered low.
How Well Does PTON Make Money?
Net Profit Margin
For every $100 in sales, Peloton Interactive, Inc. keeps $2.58 as profit after all expenses.
Operating Margin
Core operations generate 7.61 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-20.60 in profit for every $100 of shareholder equity.
ROA
Peloton Interactive, Inc. generates $3.07 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Peloton Interactive, Inc. produces operating cash flow of $387.21M, showing steady but balanced cash generation.
Free Cash Flow
Peloton Interactive, Inc. generates strong free cash flow of $377.73M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.91 in free cash annually.
FCF Yield
PTON converts 16.91% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
39.03
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.04
vs 25 benchmark
P/B Ratio
Price to book value ratio
-17.42
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.95
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-12.24
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.84
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.21
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How PTON Stacks Against Its Sector Peers
| Metric | PTON Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 39.03 | 27.16 | Worse (Expensive) |
| ROE | -20.60% | 951.00% | Weak |
| Net Margin | 2.58% | -4915.00% (disorted) | Weak |
| Debt/Equity | -12.24 | 0.61 | Strong (Low Leverage) |
| Current Ratio | 2.84 | 2.33 | Strong Liquidity |
| ROA | 3.07% | 314.00% | Weak |
PTON outperforms its industry in 2 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Peloton Interactive, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-22.72%
Industry Style: Cyclical, Growth, Discretionary
DecliningEPS CAGR
5.93%
Industry Style: Cyclical, Growth, Discretionary
GrowingFCF CAGR
-49.88%
Industry Style: Cyclical, Growth, Discretionary
Declining