In its most recent earnings report, released last Thursday, interactive fitness products provider Peloton Interactive, Inc.’s (PTON) revenue grew 6.2% year-over-year to $805.2 million in the fiscal 2022 first quarter ended September 30, 2021. However…
the company’s net loss came in at $376 million, compared to an income of $69.30 million in the year-ago period. Its loss per share came in at $1.25 compared to an EPS of $0.20 in the prior-year quarter. Moreover, PTON’s 34.06% trailing-12-month gross profit margin is lower than the industry average of 35.79%. In addition, its trailing-12-month EBITDA margin and net income margin are currently negative.
The stock has lost more than 60% over the past nine months. On November 9, 2021, the Thornton Law Firm announced its investigation against the company for potential violations of the securities disclosure laws. Also, in terms of forward EV/S ratio, its 3.85x is 159.7% higher than the 1.48x industry average. In addition, its 3.40x forward P/S is 159.9% higher than the 1.31x industry average. So, it’s wise to avoid PTON for now.
However, analysts expect the overall leisure industry to witness annualized earnings growth of 23% over the next five years. The easing of COVID-19 restrictions, pent-up demand, and an improving job market should bode well for the industry in the near term. The October job report surpassed expectations, with the unemployment rate falling to 4.6%. Also, employment in the leisure and hospitality sector has increased by 2.4 million in 2021.
Therefore, investors looking to benefit from the industry’s recovery could invest in quality leisure stocks Acushnet Holdings Corp. (GOLF – Get Rating), Vista Outdoor Inc. (VSTO – Get Rating), and Johnson Outdoors Inc. (JOUT – Get Rating) instead.
Acushnet Holdings Corp. (GOLF – Get Rating)
GOLF designs, develops, manufactures, and distributes golf products, both domestically and internationally. The company operates through four segments: Titleist Golf Balls, Titleist Golf Clubs, Titleist Golf Gear, and FootJoy Golf Wear.
On November 4, 2021, David Maher, GOLF’s President and CEO, said, “Our golf ball segment performed well against difficult year-over-year comparisons with robust demand across all models and markets. Double digit growth in our Titleist club and FootJoy golf wear segments were fueled by our next generation T-Series irons, continued success of our TSi metals and innovative new FootJoy footwear and apparel products. Our KJUS golf business continues to flourish both in the United States and Europe.”
GOLF’s net sales increased 8% year-over-year to $521.63 million for the fiscal third quarter ended September 30, 2021. Its gross profit increased 6.7% year-over-year to $268.84 million. Also, its total assets came in at $2.08 billion for the period ended September 30, 2021, compared to $1.87 billion for the period ended December 31, 2020.
For fiscal 2021, GOLF’s revenue and EPS are expected to grow 30.8% and 91.4% year-over-year to $2.11 billion and $2.45, respectively. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 50.7% to close yesterday’s trading session at $56.30.
GOLF has an A grade for Quality in our POWR ratings. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
GOLF is ranked #19 of 38 stocks in the Athletics & Recreation industry. Click here to see the additional POWR Ratings for GOLF (Momentum, Growth, Value, Sentiment, and Stability).
Vista Outdoor Inc. (VSTO – Get Rating)
VSTO designs, manufactures, and markets consumer products in the outdoor sports and recreation markets in the United States and internationally. The company operates through two segments, Shooting Sports and Outdoor Products.
On September 10, 2021, VSTO announced a definitive agreement to acquire San Diego-based Foresight Sports for $474 million in cash and available credit from the company’s revolving credit facility. This is expected to…
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