[1] Market Valuation: At P/S of 7.0, AAPL is trading at a more expensive price compared to 5.9 for PTON
Market ValuationPeloton InteractiveApplevs AppleAs of 10/25/2021 Price To Sales Ratio (P/S)5.97CheaperPrice To OpInc Ratio (P/EBIT)-127.224.5-Price To Earnings Ratio (PE)-125.428.2-
[2] Growth & Profits: Considering the valuation, the market appears to be rewarding AAPL's higher profitability, with less regard to revenue growth - PTON has demonstrated better revenue growth: -25.8% last Q (qoq), 54.3% last Q (yoy), 120.3% LTM, and 110% annually in last 3 FY - In comparison, AAPL has grown at -9.1%, 36.4%, 26.8%, and 6.2% respectively, during the same periods - However, AAPL has shown greater profit generation promise: AAPL, 27.9% average margin, 4.5% average margin expansion - The corresponding values for PTON stand at -15.8%, -22%Note: Average margin is based on average of last Q, LTM, and last 3 FY, while margin change is based on last Q margin vs 3Y average
Growth & ProfitPeloton InteractiveApplevs Apple As of 10/25/2021 Revenue GrowthLast Q Growth (QoQ)-25.8%-9.1%Growing SlowerLast Q Growth (YoY)54.3%36.4%Growing FasterLTM Growth120%26.8%Growing FasterLast 3 Fiscal Year CAGR110%6.2%Growing Faster ProfitabilityLast Q OpInc Margin-32.4%29.6%Loss MakingLTM OpInc Margin-4.6%28.8%Loss MakingLast 3 Fiscal Year Average-10.4%25.1%Loss MakingLTM FCF Margin-30.1%-
[3] Financial Risk: Also, is the market is assigning more risk to PTON? Unlikely as the company does not appear to be at higher risk vs AAPL - PTON has a better debt position, with debt as % of equity of 3.0% vs 4.6% for AAPL - AAPL has more cash cushion, with cash as % of assets of 58.7% vs 0.0% for PTON
Financial RiskPeloton InteractiveApplevs Apple As of 10/25/2021Debt as % of Equity3%4.6%Lower Debt LoadCash as % of Assets0%58.7%Worse Cash Position
[4] Market Returns: What about market returns of PTON vs AAPL? - AAPL has higher average annualized return of 42.4% vs 26.2% for PTON based on key market periods - These key market periods include, year-to-date, pre-covid to now, and 1, 2, and 3 years prior to covid
MetricsAAPLPTON Recent Returns YTD12.1%-38.2%LTM28.5%-22.3%Pre-Covid To Now117.6%251.6% Last 3 Years Returns169.5%271.8%Sharpe Ratio0.810.81Max Drawdown-34.3%
Precovid date is taken as end of Feb 2020
Notes:
[1] Q = quarter, LTM = last twelve months, FY = fiscal years, yoy = year-on-year, qoq = quarter-on-quarter
[2] Revenue growth decision is made by giving more weightage to long-term revenue growth (3-year average) and lesser weightage to quarterly growths
[3] Margin mentioned is average of last Q, LTM, and last 3 FY; margin increase is average of increase in last Q vs LTM and increase in last Q vs 3-FY average