eResearch | This past quarter, companies focused on Stay-at-home products and services, including Peloton (NASDAQ: PTON) and Etsy (NASDAQ: ETSY), experienced strong revenue growth due to the pandemic keeping consumers at home. Although Pinterest (NYSE: PINS) recorded a 49% year-over-year user increase, revenue only increased by 4%,
Peloton sells premium bikes and treads with attractive financing options, in addition to offering users access to an interactive online fitness platform with immersive, instructor-led workout classes.
Etsy operates an e-commerce website focused on handmade and vintage items, and craft supplies, which include products such as jewelry, bags, clothing, and furniture.
Pinterest operates a social media website that offers consumers a virtual discovery engine for finding ideas for recipes, home renovation, and marketing while providing a marketplace for businesses to market and sell products and services.
Peloton
In FQ4/2020, for the three months ended June 30, 2020, Peloton reported Revenue of $607 million versus S&P Capital IQ analysts’ consensus estimate of $580 million, with an EPS of $0.27 versus the consensus estimate of $0.09. This past quarter was Peloton’s first quarter to report positive earnings.
Peloton experienced a 172% increase in revenue year-over-year, as it grew Connected Fitness Product sales and Subscription sales by 199% and 99%, respectively. Connected Fitness Product sales account for 80% of Peloton’s total revenues.
Total memberships reached approximately 3.1 million, with members averaging 24.7 monthly workouts this past quarter compared with 12 in the same period last year.
This week, Peloton announced the introduction of two new Connected Fitness Products, the Peloton Bike+, and the lower-priced Peloton Tread, while lowering prices on the original Peloton Bike. Peloton’s product offerings currently include the:
- Peloton Bike: $1,895 (lowered price)
- Peloton Bike+: $2,495
- Peloton Tread: $4,295 (lowered price)
- Lower-priced Peloton Tread: $2,495 (launching in 2021)
On the earnings call, John Foley, CEO of Peloton, spoke on Peloton’s resilience during the pandemic, as he stated,
“The strong tailwind we experienced in March as the COVID-19 pandemic took hold has continued to propel the demand for our products into the fourth quarter and the first couple months of the Q1 fiscal year 2021. Organic demand for our Bike remains strong, and member engagement remains elevated despite improving weather and the gradual reopening of the brick and mortar fitness locations.
Peloton’s stock price is currently trading at $84.28 per share, a 3% decrease since the earnings announcement, and a 211% increase in the past year.
FQ1/2021 Guidance
- Revenue between $720 million and $730 million, with total Connected Fitness Subscriptions between 1.32 million and 1.33 million.
- Gross Profit Margin of approximately 41%
- Adjusted EBITDA between $80 million and $90 million.
FY2021 Guidance
- Revenue between $3.50 billion and $3.65 billion, with total Connected Fitness Subscriptions between 2.05 million and 2.10 million.
- Gross Profit Margin of approximately 41%.
- Adjusted EBITDA between $200 million and $275 million.
Etsy
In Q2/2020, for the three months ended June 30, 2020, Etsy reported Revenue of $429 million versus S&P Capital IQ analysts’ consensus estimate of $330 million, with an EPS of $0.75 versus the consensus estimate of $0.39.
Etsy increased revenues by 137% year-over-year, driven by its e-commerce platform, Etsy Marketplace, which accounts for 77% of Etsy’s total revenue.
This past quarter, active sellers on Etsy Marketplace sold $2.7 billion worth of merchandise, a 147% increase year-over-year, as more consumers turned to online shopping options due to the pandemic.
Etsy Marketplace had a 41% increase in active buyers, as it attracted 11.5 million new buyers and 7.2 million reactivated buyers who had not purchased a product in more than a year. The number of active sellers also increased by 35%.
As more active sellers join the Etsy Marketplace, Etsy recently offered a new feature, which allowed users to upload videos of themselves and their products to enhance marketing capabilities for sellers. In less than a month, over 700,000 videos were uploaded on Etsy Marketplace.
On the earnings call, John Silverman, CEO of Etsy, mentioned past investments with expectations to continue investing in growth, as he said,
“We maintain our conviction that we should be investing given the early stage of our growth and the significant opportunity ahead of us. As one example, we made a commitment in 2018 to migrate to the cloud and that took a significant investment of both money and time.”
Last month, Etsy announced the pricing of its $650 million convertible senior notes offering at an annual rate of 0.125%, with an initial conversion price representing a 52.5% premium over the last reported sale price of Etsy’s stock from the day before the announcement.
Etsy’s stock price is currently trading at $110.77 per share, an 18% decrease since the earnings announcement, and a 102% increase in the past year.
Q3/2020 Guidance
- Gross Merchandise Sales between $2.2 billion and $2.5 billion.
- Revenue between $366 million and $426 million.
- Adjusted EBITDA of $111 million and $127 million.
In Q2/2020, for the three months ended June 30, 2020, Pinterest reported Revenue of $272 million versus S&P Capital IQ analysts’ consensus estimate of $255 million, with an EPS loss of $0.17 versus the consensus estimate of a loss of $0.29.
Pinterest grew revenues by 4% year-over-year, as Global Monthly Active Users (“MAU”) increased to 417 million, a 49% increase year-over-year, due to the pandemic increasing the number of consumers seeking ideas for cooking at home, creating activities for kids, and setting up home offices.
In April, the month after the pandemic was declared, Pinterest reported its weakest period of revenue growth for this past quarter, which improved in June, with July reporting a sharp surge in revenue growth of 50% versus the prior year’s comparable period.
Last month, Pinterest shared a list of partner service offerings to support businesses using its platform, which included advertising partners such as 4C (www.4cinsights.com), content creation partners such as Hootsuite (www.hootsuite.com), and creative tools partners such as Adobe Spark (NASDAQ: ADBE).
On the earnings call, Ben Silberman, CEO of Pinterest, spoke on trends in advertising for Pinterest’s platform, as he stated,
“In a world where their balance sheets are at risk, marketers want ROI accountable ads, and we are delivering them. This has bolstered our ability to attract performance-oriented medium-sized advertisers, a group that have emerged as a key driver of our resilience in Q2.”
Pinterest’s stock price is currently at $34.11 per share, a 35% increase since the earnings announcement, and an 81% increase in the past year.
Pinterest did not provide guidance for the next quarter, given uncertainties related to the ongoing COVID-19 pandemic.
CHART 1: NASDAQ 100 (black) vs PTON (blue), ETSY (orange), and PINS (red) – Past Year Stock Performance (1-Year Chart)
Note: All numbers in USD unless otherwise stated.
