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Peloton (PTON): The Apple and Netflix of the Fitness IndustryIf you like this analysis, please make sure to like the post, and follow for more quality content! I would also appreciate it if you could leave a comment below with some original insight. What is Peloton Interactive (PTON)? - Peloton is a home fitness company that offers fitness products such as an indoor cycle, and a treadmill, as well as live workout content - Peloton is similar to Apple (AAPL) in that it promotes the establishment of a hardware-based ecosystem - It’s also similar to Netflix (NFLX) in that it offers various fitness content in subscription form Financials - They initially anticipated $1.72 billion in revenue for 2020, which has been modified to $1.74 billion due to their explosive growth - This means that PTON demonstrates a 89% year-over-year growth in revenue - Out of their total revenue, 79% consists of sales of connected fitness products, and 20% from their subscription service - PTON is one of the few stocks that has benefited from the pandemic. - With an increasing number of people staying indoors, wanting to exercise, demand for Peloton’s products and services skyrocketed. - Due to the Coronavirus (COVID-19), they have managed to be profitable for the fourth quarter with an Earnings per Share (EPS) at 27 cents. - While they are not extremely profitable yet, as PTON is a growth stock, the fact that they have $500 million in cash proves that they will be financially stable for the short term. Business Analysis - The fitness machines sold by Peloton are not normal indoor cycles and treadmills with screens attached - These fitness machines, which cost $2,245 and $4,295, apply cutting-edge technology that allow users to meticulously control the angle and resistance. - Moreover, these products provide accurate data on the user’s athletic performance. - The hardware provided by Peloton Interactive are optimized for the contents they provide. - PTON’s instructors are 30 of the most famous fitness influencers on social media. - As such, they could expand their streams of revenue to paid advertisements, and ecommerce opportunities, diversifying the business. - They offer two subscription plans: - A ‘Connected Fitness’ plan based on the hardware they offer - And a digital membership that is offered separately - Connected Fitness allows users to participate in live cycling sessions, and receive immediate feedback from the instructor - The number of users subscribing to Connected Fitness is skyrocketing, with a 94% increase in users compared to that of the last quarter - The number of subscribers for Connected Fitness surpassed 1 million in 2020 May - The digital membership subscription does not require a Peloton hardware, and offers various types of content besides running and cycling, such as yoga, meditation, and boot camps. - Their customer churn rate remains extremely low at 0.65% every quarter, while the number of users continue to grow every quarter Technical Analysis - We can see that prices have been in a phase of accumulation for a long time since later 2019 - As prices traded within a descending parallel channel, we saw a sharp breakdown caused by the market drop, which was triggered by the Corona Virus (COVID-19) - Unlike other companies that were severely affected by the virus, the pandemic was an opportunity for Peloton to grow. - As a result, we saw prices break through the $40 resistance zone, and rally in a parabolic trend - Along the way, it has undergone a phase of re-accumulation, before reaching its all-time high at $91.17 - Currently, we have seen prices cool off, bouncing at $79.34 where the 0.236 Fibonacci support and parallel channel trend line support converge - The 20 Simple Moving Average (SMA) is also a good indicator of PTON's bullish trend, as well as strong support. - Based on fundamentals, unless we see a corrective confirmation below $80, we could anticipate new all-time highs for PTON. Conclusion Peloton is on its way to completing a hierarchical process of 'hardware-software-content-community' funneling users into their ecosystem. This ecosystem that Peloton is designing has been attempted by many, but successfully done by only a few. With the development of each elements and growth as a whole, we could expect a huge augmentation in the barrier to entry. One thing to note about growth stocks such as PTON is that the essence of the business is rooted on tech. To say Peloton Interactive (PTON) is another fitness-related company like Fitbit (FIT) is to compare Amazon (AMZN) to bookstores and Tesla Motors (TSLA) to automotive companies.
NASDAQ:PTONLong
by Michael_Wang_Official
THE WEEK AHEAD: PLAY, ACB, PTON, CHWY, WORK, AEO, GDXJ, QQQ, EWZEARNINGS: Some decent earnings on tap in terms of options liquidity and implied volatility metrics this coming week. Here they are, ranked by how much the at-the-money short straddle is paying as a function of stock price: PLAY (33/136/35.5%):* Thursday after market close. ACB (30/205/32.5%): Wednesday (time not specified). PTON (66/125/32.4%): Thursday after market close. CHWY (19/112/25.7%): Thursday after market close. WORK (51/104/25.1%): Tuesday after market close. AEO (36/108/22.6%): Wednesday before market open. ORCL (42/47/10.8): Wednesday (time not specified). Pictured here is an expected move short put in PLAY with a break even at 13.70, 9.5% ROC as a function of notional risk, 88.9% ROC annualized; 4.8% ROC at 50% max/44.5% annualized at 50% max. Look to take profit at 50% max or cover if assigned. Basically, another COVID-19 recovery play (along with airlines, cruise lines, and restaurant chains). With ACB and AEO being under $20/share, my basic approach would be either short straddle or iron fly, with the latter set up to generate risk one to make one metrics. Examples: ACB October 16th 8/9 "skinny short strangle," 2.70 at the mid price. ACB October 16th 3/8/9/14 "skinny" iron fly, 2.42 credit, 2.58 max loss. AEO October 16th 13 short straddle, 2.90 at the mid price. AEO October 16th 8/13/13/18 iron fly, 2.48 credit, 2.52, max loss. With the remainder, I would generally just sell the 20-25 deltas: Examples: PTON October 16th 65/135 short strangle, 8.43 credit at the mid price. PTON October 16th 65/105/110 Jade Lizard, 6.01 at the mid price (no upside risk, downside break even at 58.99).** PTON October 16th 2 x 55/2 x 60/125/135 "double double" iron condor, 3.43 at the mid.*** CHWY October 16th 49/90 short strangle, 5.08 at the mid. CHWY October 16th 45/50/85/90 iron condor, markets showing wide in the off hours, but would look to get at least one-third the width of the wings in credit. WORK October 16th 24/41 short strangle, 2.52 at the mid. WORK October 16th 21/24/41/44 iron condor, 1.00 at the mid (but also showing wide in the off hours). EXCHANGE-TRADED FUNDS RANKED BY PERCENTAGE OF STOCK PRICE THE OCTOBER AT-THE-MONEY SHORT STRADDLE IS PAYING: TQQQ (49/117/29.0%) GDXJ (22/59/14.7%) XOP (16/56/14.3%) SLV (44/55/14.0%) GDX (23/47/12.4%) EWZ (21/48/12.4%) XLE (27/43/11.6%) USO (7/44/11.4%) SMH (26/41/10.3%) I don't usually play TQQQ because it's leveraged, but thought I'd keep an eye on it if it does a mid-March lather, rinse, repeat. BROAD MARKET: QQQ (44/38/10.2%) IWM (34/37/8.5%) SPY (26/30/6.3%) EFA (23/24/6.3%) IRA DIVIDEND PAYERS: EWZ (21/48/12.4%) EWA (27/30/7.7%) IYR (24/29/6.9%) SPY (26/30/6.3%) GLD (31/23/5.3%) TLT (17/19/4.3%) HYG (23/16/3.3%) EMB (13/13/2.7%) * -- The first number is the implied volatility rank; the second, 30-day implied volatility; and the third, the percentage the next monthly at-the-money short straddle is paying in credit as a function of stock price. ** -- Currently, PTON is showing some horrible skew on the call side, which can be accommodated via ratio, Jade Lizard, or a "double double" iron condor. *** -- Double the number of contracts on the put side with the short put at half the delta of the short call and the short call vertical aspect at double the width of the put side. Hence the term "double double."
NASDAQ:PLAY
by NaughtyPines
014. PIGGISH PLAY - Short Peloton on the OpenWow, nice earnings report PTON. Not. Bad. At. All. Here's why it's a perfect storm for a short setup tomorrow, assuming it gaps up above 94: - Gap up above a huge shooting star daily candle ---> gap will close due to massive overhead resistance - It's Friday and the market is looking like it wants to dump in a serious way - 100 dollar/share psychological target is a perfect lure for longs - A clear path downward to sub-90 - If Amazon can rip down after a 10x ER post, I believe PTON can do the same after posting results that pale in comparison This play is a short-short; meaning that I plan on opening it and closing it tomorrow, using puts that expire tomorrow with a strike at the opening price. - Health-Conscious, But Not Stupid, Pig NASDAQ:PTON
NASDAQ:PTONShort
by UnknownUnicorn5511258
17