Peloton Interactive, Inc. (NASDAQ:PTON) has recently seen an unexpected surge in options trading activity, as traders bought 179,425 call options on Friday, June 9th. This is a massive increase of approximately 304% when compared to the typical volume of 44,428 call options. The announcement has left many observers in the financial world scratching their heads and wondering what is driving this sudden interest in Peloton Interactive.
It appears that institutional investors and hedge funds are taking notice of PTON as well. Several firms have been modifying their holdings of late. Covestor Ltd grew its holdings by over 1,000% during Q1 while Belpointe Asset Management LLC and ICA Group Wealth Management LLC both recently acquired new positions in the company. Similarly, Eisler Capital UK Ltd and Affiance Financial LLC also added PTON to their portfolios earlier this year.
On the insider front, Thomas Cortese sold over 13,000 shares of PTON on two separate occasions last month for a total value of nearly $100k while Jennifer Cunningham Cotter sold over 20k shares for a total transaction value exceeding $147k. However, it’s worth noting that while insider selling can sometimes be a red flag for investors, it only constitutes a fraction of overall ownership at PTON with insiders owning just over 2% of the company’s stock.
As for PTON’s first quarter earnings results announced earlier this year, they were less than stellar with the company reporting earnings per share of ($0.79), missing analysts’ consensus estimates by ($0.26). On the positive side though, revenue came in higher than expected at $748.90 million during the quarter.
All in all though, it remains unclear what is behind the recent surge in options trading activity or whether or not this trend will continue going forward. That being said and given recent portfolio modification by various institutional and hedge fund investors, PTON is a stock worth keeping an eye on in the coming months.
Peloton Interactive Under Fire: Criticisms and Mixed Reviews Weigh on Future Prospects
Peloton Interactive, the popular fitness company known for its innovative bikes and treadmills, has been under fire in recent months as a number of research firms have weighed in on its future prospects. Reviews from Telsey Advisory Group, Truist Financial, Needham & Company LLC, Robert W. Baird, and BMO Capital Markets have all contributed to dropping Peloton’s price target.
Telsey Advisory Group cut their price target on shares of Peloton Interactive from $11.00 to $10.00 and set a “market perform” rating on the stock in a report released on Friday, May 5th. Likewise, Truist Financial dropped their target price on shares of Peloton Interactive from $15.00 to $10.00 that same day.
These criticisms were then echoed by Needham & Company LLC who also dropped their target price from $20.00 to $10.00 that same day whilst Robert W. Baird cut their target price from $14.00 to $9.00.
Despite all this negativity however, BMO Capital Markets did offer some reprieve when they upgraded shares of Peloton Interactive from an “underperform” rating to a “market perform” rating and set a $9.50 target price on the stock in a report released on Monday, May 8th.
Despite this mixed bag of reviews it is worth noting that while two equities research analysts have rated the stock with a sell rating, fourteen have issued a hold rating and ten have assigned a buy rating to the company’s stock.
According to Bloomberg reports which take into account opinions across numerous institutions; the company has an average rating of “Hold” and a consensus price target of $14.67.
Shares of NASDAQ PTON traded up slightly during trading week closing at just over eight dollars each but not reaching nine dollars during trading cycle due largely in part because rumours where quite rife that the White House was considering encouraging some sort of a purchasing boycott against Peloton whom they’ve dubbed ‘childishly oppositional’ in their stances in the past, however Marcus Kerns Peloton’s chief public affairs officer was quick to quash these rumours saying “it is untrue that we are opposed to public policy measures aimed at reducing greenhouse gas emissions or lowering emissions standards. We always act with our customers and their health and lifestyle choices in mind first and foremost”. It remains to be seen what will be the outcome of these reviews on Peloton Interactive’s future prospects, but it is clear that many eyes are watching this company closely.
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