Yahoo Finance Google searches for Peloton are plunging: stock analyst
Peloton (PTON) may be losing some popularity after a series of headline setbacks, according to analysis of Google Search trends out of Raymond James on Tuesday.
"Historically, Google Search Trends data has correlated well with Peloton hardware sales. Based on our updated analysis, the search trends data indicates continued softening of demand for Peloton sales in the December quarter. Google Trends data indicate U.S. Search Trends have declined 30% year-over-year in the December quarter (vs. -31% in the September). UK slowed to -40% year-over-year (vs. -1% year over year in Sept) while Germany searches declined 58% year-over-year (vs. -29% in the Sept qtr). Australia remains up materially (+213% year over year) though off a low base. On a sequential basis, U.S. Search trends suggest a ~10% quarter over quarter increase (vs. +15% quarter over quarter last year). UK and Germany were tracking more flattish quarter over quarter vs. significant increases last year," explains Raymond James analyst Aaron Kessler.
Kessler rates Peloton shares at Market perform. The analyst doesn't have a price target on Peloton, but sees fair value at $38. Peloton's stock as of this writing traded at $35.88.
To be sure, Peloton's stock is limping into the New Year following a host of execution missteps.
Shares are down 18% in December amid bad headlines from a product placement in the new "Sex and the City" reboot. One of the show's lead character's Mr. Big suffers a heart attack at the end of an episode after a Peloton bike class. The surprise ending fueled Wall Street's concerns over the demand for the company's bikes this holiday season.
Earlier, Peloton's stock crashed more than 30% on Nov. 5 after the company said that connected fitness subscribers of 2.49 million was roughly in-line with analyst estimates. The number of workouts on the platform trended lower for the second consecutive quarter. Sales fell well short of analyst estimates, and the company posted a wider loss than expected.
Peloton also slashed its full-fiscal year outlook.
The company sees full-year sales of $4.4 billion to $4.8 million, down sharply from $5.4 billion previously. Peloton expected a full-year adjusted operating loss of $425 million to $475 million. The company had expected an operating loss of $325 million.
Shares are now down 76% year-to-date.
Yahoo Finance Live did manage to find one of the few analysts on the Street to still be bullish on Peloton, however. Macquarie analyst Paul Golding rates Peloton at Outperform, with a sum-of-the-parts fair value range of $60 to $95.
"We look at Peloton as story of what they have built at this point. This is a globally recognized luxury brand with a vast manufacturing and shipping and logistics framework. We think that the market is discounting that," said Golding on Yahoo Finance Live.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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