Shares of fitness platform operator Peloton Interactive (NASDAQ:PTON) are giving up early gains today after the company reported a net loss and a decrease in revenues for the second quarter. Peloton’s revenue declined by 6.2% year-over-year to $743.6 million. However, the figure came in better than expectations by $10.4 million. EPS of -$0.54 landed in line with estimates.
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In Q2, the number of members declined by 4% to 6.4 million, and ending paid app subscriptions dropped by 16% to 718,000. Further, connected fitness products revenue tanked by 16%. On the other hand, the company’s subscription revenue inched up by 3%.
On its path to recovery, Peloton is banking on multiple growth initiatives, such as selling hardware by third-party sellers. The company experienced 74% unit growth through these channels during the holiday season. Further, it anticipates a 100% year-over-year growth in its bike rental model in 2024. Additionally, its Tread+ treadmill is showing stronger than anticipated demand.
For the upcoming quarter, Peloton expects total revenue in the range of $700 million to $725 million. Adjusted EBITDA is seen landing between -$20 million and -$30 million. For the full year, Peloton estimates revenue in the range of $2.67 billion to $2.75 billion. Adjusted EBITDA is anticipated to be between -$75 million and -$25 million. In comparison, the company had posted -$208.5 million in adjusted EBITDA for 2023.
What Is the Target Price for PTON Stock?
Overall, the Street has a Hold consensus rating on Peloton and the average PTON price target of $7.51 points to a hefty 35% potential upside in the stock. That’s after a nearly 57% decline in the company’s share price over the past year.
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