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PTON (Peloton Interactive) Altman Z-Score : -2.35 (As of Jul. 25, 2024)


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What is Peloton Interactive Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Warning Sign:

Altman Z-score of -2.35 is in distress zone. This implies bankruptcy possibility in the next two years.

Peloton Interactive has a Altman Z-Score of -2.35, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Peloton Interactive's Altman Z-Score or its related term are showing as below:

PTON' s Altman Z-Score Range Over the Past 10 Years
Min: -2.7   Med: 2.37   Max: 14.67
Current: -2.35

During the past 7 years, Peloton Interactive's highest Altman Z-Score was 14.67. The lowest was -2.70. And the median was 2.37.


Peloton Interactive Altman Z-Score Historical Data

The historical data trend for Peloton Interactive's Altman Z-Score 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 Altman Z-Score Chart

Peloton Interactive Annual Data
Trend Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23
Altman Z-Score
Get a 7-Day Free Trial - 8.43 9.08 -1.67 -1.95

Peloton Interactive Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
Altman Z-Score 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 -2.45 -1.95 -2.01 -2.02 -2.29

Competitive Comparison of Peloton Interactive's Altman Z-Score

For the Leisure subindustry, Peloton Interactive's Altman Z-Score, along with its competitors' market caps and Altman Z-Score 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 Altman Z-Score Distribution in the Travel & Leisure Industry

For the Travel & Leisure industry and Consumer Cyclical sector, Peloton Interactive's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Peloton Interactive's Altman Z-Score falls into.



Peloton Interactive Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Peloton Interactive's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.2805+1.4*-2.2641+3.3*-0.2713+0.6*0.4284+1.0*1.1207
=-2.35

* 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. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Mar. 2024:
Total Assets was $2,409 Mil.
Total Current Assets was $1,421 Mil.
Total Current Liabilities was $746 Mil.
Retained Earnings was $-5,453 Mil.
Pre-Tax Income was -166.7 + -196.6 + -158.5 + -241.6 = $-763 Mil.
Interest Expense was -27.7 + -27.7 + -27.2 + -27.4 = $-110 Mil.
Revenue was 717.7 + 743.6 + 595.6 + 642.2 = $2,699 Mil.
Market Cap (Today) was $1,285 Mil.
Total Liabilities was $2,999 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(1421 - 745.5)/2408.5
=0.2805

X2=Retained Earnings/Total Assets
=-5453.2/2408.5
=-2.2641

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(-763.4 - -110)/2408.5
=-0.2713

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=1284.871/2998.9
=0.4284

X5=Revenue/Total Assets
=2699.1/2408.5
=1.1207

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Peloton Interactive has a Altman Z-Score of -2.35 indicating it is in Distress Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Peloton Interactive  (NAS:PTON) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Peloton Interactive Altman Z-Score 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 sales of bike and tread and related accessories, associated fees for delivery and installation, and extended warranty agreements. Subscription revenue consists of revenue generated from monthly Connected Fitness Subscription and Digital Subscription. The company generates the majority of the revenue from the sale of Connected Fitness Products.
Executives
Elizabeth F Coddington officer: Chief Financial Officer C/O PELOTON INTERACTIVE, INC., 441 NINTH AVENUE, SIXTH FLOOR, NEW YORK NY 10001
Andrew S Rendich officer: Chief Supply Chain Officer 100 WINCHESTER CIRCLE, LOS GATOS CA 95032
Jennifer Cunningham Cotter officer: Chief Content Officer C/O PELOTON INTERACTIVE, INC., 441 NINTH AVENUE, SIXTH FLOOR, NEW YORK NY 10001
Leslie Berland officer: Chief Marketing Officer C/O PELOTON INTERACTIVE, INC., 441 NINTH AVENUE, SIXTH FLOOR, NEW YORK NY 10001
Saqib Baig officer: Chief Accounting Officer C/O PELOTON INTERACTIVE, INC., 441 NINTH AVENUE, SIXTH FLOOR, NEW YORK NY 10001
Nick V. Caldwell officer: Chief Product Officer C/O HUBSPOT, INC., 25 FIRST STREET, CAMBRIDGE MA 02141
Thomas Cortese officer: COO and Head of Prod. Dev. C/O PELOTON INTERACTIVE, INC., 441 NINTH AVENUE, SIXTH FLOOR, NEW YORK NY 10001
Allen J Klingsick officer: Chief Accounting Officer C/O PELOTON INTERACTIVE, INC., 441 NINTH AVENUE, SIXTH FLOOR, NEW YORK NY 10001
Kevin Cornils officer: Chief Commercial Officer C/O PELOTON INTERACTIVE, INC., 441 NINTH AVENUE, SIXTH FLOOR, NEW YORK NY 10001
Jill Woodworth officer: Chief Financial Officer C/O PELOTON INTERACTIVE, INC., 125 WEST 25TH STREET, 11TH FLOOR, NEW YORK NY 10001
William Lynch director, officer: President C/O HSN, INC., 1 HSN DRIVE, ST. PETERSBURG FL 33729
Mariana Garavaglia officer: Chief Bus. Operations Officer 6600 CHASE OAKS BLVD, PLANO TX 75023
Barry Mccarthy director, officer: CEO and President 100 WINCHESTER CIRCLE, LOS GATOS CA 95032
Angel L Mendez director C/O SLEEP NUMBER CORPORATION, 1001 THIRD AVENUE SOUTH, MINNEAPOLIS MN 55404
Jonathan Mildenhall director C/O GRAUBARD MILLER, 405 LEXINGTON AVENUE, NEW YORK NY 10174