Barron\'s - 02.09.2019

September 2, 2019 BARRON’S 9

PELOTON EYES AN IPO

Pedaling for

Dollars

Five years ago, Peloton Interactive CEO John Foley told

Barron’s about the struggles in raising money for his

spinning-streaming mash-up. At the time, Peloton was

selling 1,000 of its indoor bikes a month—at $2,000 a

pop—but investors hadn’t yet ridden a coming wave of

fitness-related tech disruption.

Peloton classes—streamed live or on demand to cus-

tomers’ at-home bikes—developed a cult following and

went on to inspire an entire connected-fitness industry.

The company ultimately raised nearly $1 billion in pri-

vate capital.

Now, public investors will have to decide how much

money to throw at Peloton, which filed to go public this

past week. The company’s initial-public-offering paper-

work showed $915 million in sales last year—up 110%—

and a net loss of $195.6 million.

A spokeswoman told Barron’s last December that Pelo-

ton’s U.S. bike business was profitable but that it was in-

vesting in product, retail, and international opportunities.

Big losses have weighed on the public debuts of

ride-hailing giants Uber Technologies and Lyft .But

the market has a soft spot for subscription businesses

with recurring revenue, like Peloton’s. The company

will have to convince investors that its bike and its new,

even pricier treadmill, aren’t like older generations of

exercise equipment that eventually become clothing

racks.One tidbit from the IPO filing may help: Long-

paying subscribers—those who signed up three to four

years ago—are still taking an average of eight classes a

month.—Alex Eule

Spinning Up

Peloton’srevenuesoared110%inits

2019 fiscal year, but losses mounted.

Breaking Away

Here are the post-IPO returns for

threeof2019’stoplistings.

Source: Company Reports

2017 2018 2019

$1 Billion

500

250

0

• 
  


• 
  

750

Revenue NetLoss

Beyond Meat..............................

IPO price:$

Recent Price:$167.

Gain: 571%

Zoom Video Communications

IPO Price:$

Recent price:$91.

Gain: 155%

CrowdStrike Holdings

IPO price:$

Recent price:$81.

Gain: 139%

Monday 9/

Stock and bond markets in the U.S.

and Canada are closed in observance

of Labor Day.

Tuesday 9/

Coupa Software releases earnings

for the second quarter of fiscal 2020.

The Reserve Bank of Australia an-

nounces its monetary-policy decision.

The central bank is widely expected to

keep its target cash rate at 1%.

The Institute for Supply Manage-

ment releases its Manufacturing Re-

port on Business for August. Consen-

sus estimates are for a 51.5 reading,

roughly even with July’s data. The July

figure was the lowest for the index

since August of 2016, indicating a

weakening manufacturing sector.

The Census Bureau reports con-

struction spending data for July. Econ-

omists forecast a 0.3% gain to a sea-

sonally adjusted annual rate of $1.

trillion, after a 1.3% decline in June.

Wednesday 9/

American Eagle Outfitters, Mongo-

DB , Navistar International , Palo

Alto Networks , and Slack Technolo-

gies report quarterly results.

The Bank of Canada announces its

interest-rate decision. The futures

market predicts a slim chance that the

central bank will lower its key short-

term rate to 1.5% from the current

1.75%.

The Census Bureau reports the trade

deficit in goods and services for July.

Expectations are for a $53.5 billion

shortfall, similar to June’s $55.2 billion

deficit. June’s data confirmed the im-

pact of the ongoing trade war with

China, as Mexico passed China as the

U.S.’s largest trade partner. Canada

also vaulted past China, which had

held the top spot since 2015.

Day Consensus Estimate Year Ago

T

Conn’s (2Q) $0.51 $0.

W

Finisar (1Q) 0.25 0.

American Eagle Outfitters (2Q) 0.32 0.

Vera Bradley (2Q) 0.27 0.

More Earnings on Page M

Coming Earnings

Day Consensus Est Last Period

T July Construction Spending 0.3% -1.3%

W July International Trade $-53.5 bil $-55.2 bil

TH July Factory Orders 1.2% 0.6%

F August Nonfarm Payrolls 157,000 164,

August Unemployment Rate 3.7% 3.7%

Unless otherwise indicated. a-Advanced; f-Final; p-Preliminary;

r-Revised

Source: FactSet

Consensus Estimate

For more information about coming economic reports - and

what they mean - go to Barron’s free Economic Calendar at

http://www.Barrons.com

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Preview daily newsletter at

Barrons.com/reviewpreview

The BLS releases the employment report for August.

Expectations are for a gain of 157,000 in nonfarm hires,

with the unemployment rate remaining steady at 3.7%, near half-century lows.

Friday

PREVIEW

Thursday 9/

Guidewire Software, Lulemon Ath-

letica , and Zoom Video Communi-

cations hold conference calls to dis-

cuss earnings.

The NFL’s 100th season kicks off

with the 199th meeting between the

Green Bay Packers and host Chicago

Bears at Soldier Field.

Ecolab hosts its biennial investor day

in Naperville, Ill.

Costco Wholesale reports August

sales data.

ADP releases its National Employ-

ment Report for August. Consensus

estimates are for a gain of 157,

private-sector jobs, after a rise of

156,000 in July.

ISM releases its Non-Manufacturing

Report on Business for August. Econ-

omists forecast a 53.8 reading, roughly

even with July’s figure.

Friday 9/

The BLS releases the employment

report for August. Expectations are

for a 3.1% year-over-year rise in

hourly wages, while the average work-

week is seen clocking in at 34.4 hours.

Elias Stein