Wrapping up Q3 earnings, we look at the numbers and key takeaways for the consumer electronics stocks, including Peloton (NASDAQ:PTON) and its peers.
Consumer electronics companies aim to address the evolving leisure and entertainment needs of consumers, who are increasingly familiar with technology in everyday life. Whether it’s speakers for the home or specialized cameras to document everything from a surfing session to a wedding reception, these businesses are trying to provide innovative, high-quality products that are both useful and cool to own. Adding to the degree of difficulty for these companies is technological change, where the latest smartphone could disintermediate a whole category of consumer electronics. Companies that successfully serve customers and innovate can enjoy high customer loyalty and pricing power, while those that struggle with these may go the way of the VHS tape.
The 4 consumer electronics stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 2.3% below.
In light of this news, share prices of the companies have held steady as they are up 1.4% on average since the latest earnings results.
Peloton (NASDAQ:PTON)
Started as a Kickstarter campaign, Peloton (NASDAQ: PTON) is a fitness technology company known for its at-home exercise equipment and interactive online workout classes.
Peloton reported revenues of $585.9 million, down 1.6% year on year. This print exceeded analysts’ expectations by 2.5%. Overall, it was a very strong quarter for the company with EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EPS estimates.
Interestingly, the stock is up 28.8% since reporting and currently trades at $8.56.
Is now the time to buy Peloton? Access our full analysis of the earnings results here, it’s free.
Best Q3: GoPro (NASDAQ:GPRO)
Known for sponsoring extreme athletes, GoPro (NASDAQ:GPRO) is a camera company known for its POV videos and editing software.
GoPro reported revenues of $258.9 million, down 12% year on year, outperforming analysts’ expectations by 1.5%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 23.9% since reporting. It currently trades at $1.11.
Is now the time to buy GoPro? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Apple (NASDAQ:AAPL)
Creator of the iPhone and shepherd of the App Store, Apple (NASDAQ:AAPL) is a legendary developer of consumer electronics and software.
Apple reported revenues of $94.93 billion, up 6.1% year on year, exceeding analysts’ expectations by 0.5%. It was a a satisfactory quarter as it also posted a narrow beat of analysts’ operating income estimates but revenue fell short of Wall Street’s estimates.
Apple delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. Interestingly, the stock is up 1.7% since the results and currently trades at $229.18.
Read our full analysis of Apple’s results here.
Sonos (NASDAQ:SONO)
A pioneer in connected home audio systems, Sonos (NASDAQ:SONO) offers a range of premium wireless speakers and sound systems.
Sonos reported revenues of $255.4 million, down 16.3% year on year. This print topped analysts’ expectations by 2.8%. Overall, it was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates.
Sonos pulled off the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is flat since reporting and currently trades at $13.97.
Read our full, actionable report on Sonos here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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