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- Peloton Spikes Over 35%
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Market Moves Yesterday
S&P 500 @ 5,570.64 ( ⬇️ 0.89%)
Nasdaq Composite @ 17,619.35 ( ⬇️ 1.67%)
Bitcoin @ $61,096.42 ( ⬆️ 0.55%)
Hey Scoopers,
Happy Friday! Here’s what we’re covering today:
👉 Peloton reports its best day ever
👉 Zoom stock surges almost 12%
👉 Are home sales under pressure?
So, let’s go 🚀
Market Wrap
Equity indices pulled back on Thursday as investors await a speech by the Federal Reserve Chair Jerome Powell at the central bank’s annual Jackson Hole conference.
Powell will deliver his annual keynote policy speech within the next three hours as markets expect the central bank to signal an interest rate cut in September, in addition to monetary policy plans.
Stocks retreated yesterday following a largely positive period, as investors bought the dip following the global market rout on Aug. 5.
All three major indices traded higher at one point in the session, with the S&P 500 within touching distance of its all-time intraday high set in July before reversing course.
Trending Stocks 🔥
Cava Group - The fast-casual restaurant brand saw shares climb nearly 10% in pre-market following a better-than-expected earnings report.
Uber - Shares of the ride-hailing platform are down 1% in pre-market after the company and General Motors’ Cruise announced a multiyear partnership.
Ross Stores - The off-price retailer’s stock surged 5.5% in pre-market following an earnings beat.
Can Peloton Finally Recover?
Shares of Peloton rose by more than 35% after the company reported revenue growth for the first time in nine quarters. Further, the connected fitness player indicated it would continue to focus on profitability over growth by significantly cutting its marketing and sales spending.
These cuts have helped Peloton narrow its quarterly losses from $241.1 million to $30.5 million in the last 12 months.
In the June quarter, Peloton reported:
👉 Revenue of $644 million vs. estimates of $631 million
👉 Loss per share of $0.08 vs. estimates of $0.17
Peloton increased sales by 0.2% year over year, even as sales for its connected fitness hardware were down 4%. Alternatively, subscription sales were up 2.3%, increasing its gross margins by one percentage point.
Peloton delivered a positive adjusted EBITDA and free cash flow for the second consecutive quarter. While EBITDA stood at $70 million, free cash flow was $26 million, as sales and marketing spending fell by 19% to $25.5 million.
Peloton expects adjusted EBITDA between $50 million and $60 million in the current quarter, above estimates of 45 million. However, sales are forecast at $570 million, well below estimates of $609 million.
Zoom Video Exceeds Estimates
Zoom shares rose 13%, the most since November 2022, after the video chat company reported better-than-expected results and raised its full-year guidance.
Zoom reported sales of $1.16 billion, up 21% year over year and above estimates of $1.15 billion. Adjusted earnings per share stood at $1.39, above estimates of $1.21.
Zoom expects sales between $4.63 billion and $4.64 billion in fiscal 2025 (ending in January), above the top end of its earlier guidance of $4.62 billion.
Zoom has struggled in a post-pandemic world due to a deceleration in sales growth. However, the company is reducing customer churn and growing its contact center business.
Despite the uptick in share prices, Zoom Video stock is still down 90% from all-time highs.
Home Sales Fall in July
Closed sales of previously owned homes rose 1.3% in July compared with June, according to a report from the National Association of Realtors. However, sales were still down 2.5% year over year.
Despite the modest gain, home sales remain sluggish amid rising interest rates. The closed sales are based on contracts signed in May and June when the 30-year mortgage was still over 7%.
All-cash offers accounted for 27% of July sales, an increase of 26% year over year and much higher than the historical average.
The supply of homes for sale increased in July. At the end of the month, 1.33 million houses were on the market, almost 20% higher than the year-ago period.
The increase in sales did not help cool home prices, as the median price of an existing home sold in July rose 4.2% year over year to $442,600.
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Chart of The Day
Warren Buffett is the Chairman of Berkshire Hathaway, a diversified conglomerate with a sizeable equity position in several companies across sectors.
However, in Q2 of 2024, Berkshire significantly increased its cash position and reduced exposure to blue-chip stocks such as Apple and Bank of America.
Does the Oracle of Omaha expect the equity markets to correct soon?
Meme of the Day
DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.