Peloton: Riding High and Crashing Low
Then came the normalization period as COVID restrictions eased by the end of 2021 and the start of 2022. The company continued to lose massive amounts of money after hitting a $47 million profit in Q2 2021. Manufacturing issues and supply chain disruptions led to long shipping delays and backlogs, which strained customer demand. As people returned to gyms, demand collapsed. Peloton shares fell to a low of $2.70 in May of 2024.
Replacing the Founder With a New CEO
Peloton Finally Reports a Breakeven Quarter
On Oct. 31, 2024, Peloton reported a net EPS breakeven quarter for its fiscal first quarter of 2025, beating analyst estimates by 15 cents. GAAP net loss was just $1 million, a $158 million YoY improvement. Net cash provided by operating activities improved by 92% YoY to $12 million.
Revenue declined 1.6% YoY to $586 million, beating consensus estimates of $572.97 million. The company expects to deliver over $200 million in run-rate cost savings by the end of fiscal 2025.
Bolstering the Subscription Model and Appointing Its New CEO
The company really focused on growing its subscription business. The company had over 6 million members, 2.9 million Paid Connected Fitness subscribers, and 582,000 Paid App subscribers, resulting in $1.7 billion of annualized subscription revenue and a 67.8% subscription gross margin. Two-thirds of its subscribers are women, and the company sees an opportunity to grow its male memberships. Paid Connected Fitness Subscription Churn was 1.9% in Q1.
Teladoc: Telemedicine Enables Virtual Doctor House Calls Until Live Visits Resume
The $4.5 Million Better Health Business Acquisition Was a Game-Changer
Teladoc Stabilizing as Revenue Decline Slows
On Oct. 30, 2024, Teladoc reported an EPS loss of 19 cents, beating consensus estimates by 9 cents. Net loss was $33 million, while adjusted EBITDA fell 6% YoY to $83.3 million. BetterHelp revenue fell 10% YoY to $256.8 million with an adjusted EBITDA margin of 5.9%.
Revenue fell 3% YoY to $640.9 million, beating consensus estimates of $631.18 million. While U.S. revenue fell 5.8% YoY to $536.18 million, international revenue grew 14.8% YoY to $104.35 million. U.S. integrated care members rose 4.1% YoY to a record 93.9 million.
Teladoc Issues Upside Guidance
In a rare turn of events, Teladoc issued upside guidance for Q4 2024, with revenue expected to grow from $646 million to $662 million versus $633.02 million consensus estimates.
Goldman Sachs Likes What They See
Analyst David Roman commented that the integrated care business will drive Teladoc's membership and revenue growth and stabilize EBITDA in 2025. A better-targeted BetterHelp strategy can lead to growth in 2026. Roman initiated the cover of Teladoc's stock with a Buy rating and a $14 price target.
The article "2 Former Pandemic Darlings Eyeing a Big 2025 Turnaround" first appeared on MarketBeat.
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