00:07 Speaker A
Planet Fitness and Peloton both announcing quarterly results and telling two different tales in the fitness space. For more we’re bringing out Yahoo Finance’s Brooke De Palma.
00:19 Speaker A
All right, but let’s start with Planet Fitness. This was interesting because they report results and initially you saw this slump. I mean Right. a big slump, a hard slump. Uh, and they cut because listen, that made sense. They cut their revenue outlook, but now then reverse is, you’re in the green. What do you make of it?
00:40 Brooke DiPalma
Yeah, so I’m actually looking through and I’m surprised to see a reverse to the green because we did get a downgrade on top of that news that we got today. We saw Bank of America downgrade Planet Fitness to neutral because of the fact that they had what Bank of America said was limited near-term catalyst. I mean, this was the company maybe investors sort of digesting this, seeing this as a way to get in. I’m going to look quick at the year to date down about 60%. It’s been totally crushed.
00:54 Speaker A
That’s a disastrous
00:55 Brooke DiPalma
So maybe investors are thinking like, okay, is this the bottom? Does it only go up from here? It was interesting. I was reading a few notes, you know, ahead of coming on and William Blair analyst Sharon Zackfia, she had pointed out a few different headwinds that the company faced. One, uh, it’s foregoing those Black Card price increases because of this macro environment right now. They’re not going to raise prices on their Black card. On top of that, too, it overall was just a weaker first quarter quarter. You had those a low-income consumers under pressure. That ultimately meant that they weren’t going out and spending on a new gym membership. And you also had that bad weather. So maybe people tried it in January and then said, forget about it. I’m not going to the gym. Keep in mind, Planet Fitness is a majority of first-time fitness members. So maybe this is their first taste, maybe they didn’t sign up as much as I had hoped to see. Yeah.
01:39 Speaker A
I I I do. I mean Planet’s Fitness, it’s a value brand, ultimately. Yeah.
01:43 Brooke DiPalma
It is, it is. And and like I said, it’s their first time fitness experience. Maybe this is like a a shoe in the door. Maybe they try it out and then maybe they don’t want to stick around and stay. And I think that sort of speaks to not only what we saw during this quarter, but it was Planet Fitness kind of a failed attempt at maybe trying to be a little bit more luxurious, a little bit more premium because once again, they’re not going to raise prices for their most expensive membership, that black card. And tests went well, but I guess in this environment they’re just saying, they’re not going to do it.
02:08 Speaker A
Yeah, stock has been crushed. Most analysts seem to think it’s pricing in a lot of bad news already because most on the street do have a buy at this point on the name. Right. All right, another one I check out, Peloton. Let’s talk about that one. Now they reported, uh, the pandemic darling of course. What do you think is Peloton starting to find its footing?
02:24 Brooke DiPalma
I mean, I thought it was really interesting and and I’d be curious to see in the within the transcript and such of what they said about Spotify because I mean, what they said about Spotify was that ultimately there’s hundreds of millions of Spotify premium subscribers. They also said that when they announced that news, they expect hundreds of more classes to be available to Spotify premium subscribers this month. On top of that, too, you have some on the street saying, hey, this was a better than expected quarter. also was profitable. I mean, that’s huge for Peloton as well. And it seems like there’s some new launches coming out this fall, maybe even a more low-cost tread meal, tread meal, tread mill. And so I think that there’s a few different factors that are playing into this company right now after, you know, since the pandemic, it really hasn’t maybe performed as well as we had thought, taking a look over the past five years. The stock is down 93% and year to date, still down about 8%. So is once again, is this also maybe perhaps going on the up?
03:22 Speaker A
street not as convinced. I see nine buys, but I also see 11 holds and one sell.
03:28 Brooke DiPalma
Okay.