Forget Peloton, Buy These 3 Leisure Stocks Instead By StockNews

While the leisure industry is rebounding with the easing of COVID-19 restrictions, not all industry participants are well-positioned to gain in the near term. For instance, Peloton Interactive (NASDAQ:) just slashed its guidance when it reported earnings last Thursday. However, there are other stocks, such as Acushnet Holdings (NYSE:), Vista Outdoor (NYSE:), and Johnson Outdoors (NASDAQ:), which are well-positioned to see significant gains in the coming months.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.

Continue reading on StockNews