Sunday Updates: Peloton Is Cheap, TTD, BIDU (Issue #11)
Recent Updates:
Peloton Interactive Inc (NASDAQ: PTON — $3 billion) could be cheap. Some back-of-the-envelope valuation below shows that Peloton could be undervalued. Also in case, you missed the last deep dive on Peloton go check it out. On a deeper level to reinforce the analysis below, this would be suggesting that Peloton users leave after less than a year. However, this isn’t the case, Peloton has a churn rate of less than 1% per month. This would suggest users for the most part stay for decades. Peloton has not had enough history to prove this and this seems unlikely to be true. That said users definitely stay subscribed for longer than a year or two at the bare minimum.
Trade Desk Inc (NASDAQ: TTD — $20.26 billion) could be a good opportunity. Just on a base level, it produced 44% free cash flow (FCF) in Q2 2022. This is the kind of growth machine and structure of business companies like Peloton need to re-organize themselves to become. Just like all stocks right now Trade Desk was hit hard recently down 55% from its peak. This downturn for the stock started when companies advantaged by the pandemic were receding as more people returned to offices. Trade Desk got swept along in this, but unlike other companies caught in this move has been able to maintain strong returns. Therefore the stock being hit could’ve been an overreaction by the market making it a potential opportunity.
Streaming News:
Baidu is considering selling its significant stake in iQIYI
Madrid is considering hosting a Formula 1 race
Newest Stranger Things Episode Launched On Netflix on July 1st
Tweets Of The Week:
Until Next Time,
Soren
Disclaimer: Soren Peterson holds positions in FWONK and GOOG. This is not financial advice. Soren Peterson and The Streaming Jungle Newsletter aren’t responsible for any investment results.