Peloton Gears Up for Q4 Earnings: What's in Store?

Peloton Interactive, Inc. PTON is scheduled to report fourth-quarter fiscal 2024 results on Aug 22, before the opening bell. In the last reported quarter, the company's earnings missed the Zacks Consensus Estimate by 15.4%.

The Trend in Estimate Revision

The Zacks Consensus Estimate for the fourth quarter is pegged at a loss of 18 cents per share. It reported a loss of 68 cents per share in the year-ago quarter.

For revenues, the consensus mark is pegged at $626.3 million, indicating a decline of 2.5% from the year-ago quarter's reported figure.

Factors at Play

Peloton is anticipated to report a decline in fourth-quarter revenues from the year-ago levels due to a decrease in Connected Fitness Products revenues and increased churn in Connected Fitness subscriptions. Nevertheless, the impact of these challenges is expected to have been partially mitigated by the company's growth initiatives and strategic partnerships. Additionally, PTON's emphasis on global expansion is likely to have acted positively.

For the to-be-reported quarter, the Zacks Consensus Estimate for Connected Fitness Products revenues is pegged at $193.9 million, down 12% from the prior-year level. However, revenues from subscription are expected to increase 3% year over year to $434.3 million.

Meanwhile, loss per share is likely to have narrowed year over year owing to the company's cost reduction efforts.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Peloton this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. But that's not the case here.

Earnings ESP: Peloton has an Earnings ESP of -37.59% at present.

Zacks Rank: Peloton currently has a Zacks Rank #3.

Stocks Poised to Beat Earnings Estimates

Here are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Ollie's Bargain OLLI currently has an Earnings ESP of +2.38% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 78 cents implies an increase of 16.4% from the year-ago reported number.

Ollie's Bargain's top line is expected to have ascended year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $562.4 million, which indicates an increase of 9.3% from the prior-year quarter. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.

Burlington Stores BURL has an Earnings ESP of +5.62% and a Zacks Rank of 3 at present. The company is expected to register top and bottom-line growth when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for BURL's quarterly earnings has increased a penny in the past 30 days to 93 cents per share. The consensus mark for earnings indicates a 55% surge from the figure reported in the year-ago quarter.

The consensus estimate for quarterly revenues is pegged at $2.41 billion, which calls for a rise of 10.9% from the reported figure in the year-ago quarter. BURL delivered a trailing four-quarter average earnings surprise of 21.7%.

Costco Wholesale Corporation COST currently has an Earnings ESP of +0.89% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COST's quarterly revenues is pegged at $80.1 billion, which implies growth of 1.4% from the year-ago quarter's reported figure.

The consensus estimate for Costco's bottom line has been stable at $5.02 in the past 30 days. The consensus mark for earnings implies growth of 3.3% from the year-ago quarter's reported figure. COST delivered an earnings beat of 2.3%, on average, in the trailing four quarters.

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