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


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What is Peloton Interactive ROIC %?

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

As of today (2024-12-13), Peloton Interactive's WACC % is 14.97%. Peloton Interactive's ROIC % 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 ROIC % Historical Data

The historical data trend for Peloton Interactive's ROIC % 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.

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Peloton Interactive ROIC % Chart

Peloton Interactive Annual Data
Trend Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23 Jun24
ROIC %
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
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -24.25 -48.85 -27.84 -17.87 14.96

Competitive Comparison of Peloton Interactive's ROIC %

For the Leisure subindustry, Peloton Interactive's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Peloton Interactive's ROIC % Distribution in the Travel & Leisure Industry

For the Travel & Leisure industry and Consumer Cyclical sector, Peloton Interactive's ROIC % distribution charts can be found below:

* The bar in red indicates where Peloton Interactive's ROIC % falls into.



Peloton Interactive ROIC % Calculation

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

ROIC % (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

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

ROIC % (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

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

* 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.


Peloton Interactive  (LTS:0A46) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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 14.97%. Peloton Interactive's ROIC % is -21.28% (calculated using TTM income statement data).


Be Aware

Like ROE % and ROA %, ROIC % 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 ROIC % Related Terms

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Peloton Interactive Business Description

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

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