Needham analyst Bernie McTernan has reiterated their neutral stance on PTON stock, giving a Hold rating yesterday.
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Bernie McTernan has given his Hold rating due to a combination of factors related to Peloton Interactive’s recent financial performance and future growth prospects. The company’s latest quarterly results showed impressive margin execution and cost management, leading to a notable beat in adjusted EBITDA and free cash flow. However, despite these positive financial metrics, McTernan remains cautious about the company’s overall growth trajectory.
While Peloton appears to be on a path to improved profitability with a streamlined cost structure, McTernan is concerned about the sustainability of subscriber growth. The stock may seem undervalued based on the increased short-term adjusted EBITDA estimates, but the analyst believes that the company is advancing its margin expansion prematurely. This, coupled with an uncertain outlook for subscriber growth, suggests limited potential for the stock’s valuation to increase significantly in the near term.
McTernan covers the Consumer Cyclical sector, focusing on stocks such as Super Group (SGHC), DraftKings, and PENN Entertainment. According to TipRanks, McTernan has an average return of 7.8% and a 51.70% success rate on recommended stocks.
In another report released yesterday, Telsey Advisory also maintained a Hold rating on the stock with a $8.00 price target.