Peloton Interactive (LTS:0A46) ROC % : 14.96% (As of Sep. 2024)

View and export this data going back to 2020. Start your Free Trial

What is Peloton Interactive ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Peloton Interactive's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 14.96%.

As of today (2024-12-11), Peloton Interactive's WACC % is 14.83%. Peloton Interactive's ROC % is -21.28% (calculated using TTM income statement data). Peloton Interactive earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Peloton Interactive ROC % Historical Data

The historical data trend for Peloton Interactive's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Peloton Interactive ROC % Chart

Peloton Interactive Annual Data

Trend

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

ROC %

Get a 7-Day Free Trial

-9.99

-10.27

-94.59

-47.26

-29.02

Peloton Interactive Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															-24.25	-48.85	-27.84	-17.87	14.96

Peloton Interactive ROC % Calculation

Peloton Interactive's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2024 is calculated as:

	ROC % (A: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2023 )	+	Invested Capital (A: Jun. 2024 ))	/ count )
=	-405.6 * ( 1 - 0.04% )	/	( (1558.6	+	1235.4)	/ 2 )
=	-405.43776	/	1397
=	-29.02 %

where

	Invested Capital		(A: Jun. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	2769.1	-	396.6	-	( 813.9	-	max(0, 761.4	-	1639.1	+	813.9	))
=	1558.6

	Invested Capital		(A: Jun. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	2185.2	-	369	-	( 697.6	-	max(0, 685.2	-	1266	+	697.6	))
=	1235.4

Peloton Interactive's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	175.6 * ( 1 - 0% )	/	( (1235.4	+	1112.4)	/ 2 )
=	175.6	/	1173.9
=	14.96 %

where

	Invested Capital		(Q: Jun. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	2185.2	-	369	-	( 697.6	-	max(0, 685.2	-	1266	+	697.6	))
=	1235.4

	Invested Capital		(Q: Sep. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	2157.1	-	399.8	-	( 722.3	-	max(0, 640.2	-	1285.1	+	722.3	))
=	1112.4

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

Peloton Interactive (LTS:0A46) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Peloton Interactive's WACC % is 14.83%. Peloton Interactive's ROC % is -21.28% (calculated using TTM income statement data). Peloton Interactive earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Peloton Interactive ROC % Related Terms

Thank you for viewing the detailed overview of Peloton Interactive's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Peloton Interactive Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » Peloton Interactive Inc (LTS:0A46) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

PTON:USA PTON:Mexico 1PTON:Italy 2ON:Germany PTON:Austria

Address

441 Ninth Avenue, Sixth Floor, New York, NY, USA, 10001

Website

https://www.onepeloton.com

Peloton Interactive Inc operates an interactive fitness platform. It operates its business in two reportable segments: Connected Fitness Products and Subscription. Connected Fitness Product revenue consists of bike and tread and related accessories sales, associated fees for delivery and installation, and extended warranty agreements. Subscription revenue is generated from monthly Connected Fitness Subscription and Digital Subscription. The company generates maximum revenue from the Subscription segment. Geographically, the company derives a majority of its revenue from North America and the rest from the International markets.

Peloton Interactive Headlines

No Headlines