Peloton (PTON 5.23%) had its initial public offering (IPO) in September 2019, and the stock has taken investors on a wild ride since its market debut. The stock had its public debut shortly before the coronavirus pandemic, whose related shelter-in-place and social-distancing conditions resulted in dramatic changes to daily life.
Peloton stock saw massive gains as pandemic-related dynamics resulted in skyrocketing demand for its in-home exercise equipment and related service packages. Unfortunately, the company's sales momentum saw a substantial drawdown as tailwinds connected to the pandemic receded. As of this writing, the company's share price is down roughly 87% over the last five years of trading.
On the heels of continued sell-offs this year, Peloton is valued at just 1.2 times this year's expected sales. Meanwhile, the company posted an unexpected profit in the fourth quarter of its last fiscal year -- which ended June 30. Does Peloton have a path to a massive comeback and turning a $10,000 investment into $50,000 over the next five years?
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Could Peloton stock be one of the market's next big comeback stories?
With the quarterly results that Peloton published on Aug. 7, the company reported earnings per share of $0.05 on sales of $606.9 million. The results came in far better than the average Wall Street analyst estimates, which had actually called for a loss of $0.05 per share on revenue of roughly $579.9 million.
Peloton managed to post an unexpected shift into profitability thanks to some big cost-cutting moves, but revenue was still down roughly 5.7% year over year in fiscal Q4. The company announced $100 million in new cost-cutting moves for the current fiscal year with its latest quarterly report and said that it expects sales will decline roughly 2% annually in the current fiscal year. While it's not impossible that new business developments or unexpected catalysts could spur big returns for the stock, it seems highly unlikely that a $10,000 investment in the company will be worth $50,000 five years from now.
