Peloton Interactive: Balancing Profitability Improvements with Cautious Outlook Amid Challenges

Analyst Doug Anmuth of J.P. Morgan maintained a Hold rating on Peloton Interactive (PTON – Research Report), retaining the price target of $7.00.

Doug Anmuth’s rating is based on Peloton Interactive’s ongoing efforts to improve profitability and focus on early growth initiatives. The company has raised its FY25 adjusted EBITDA guidance and expects free cash flow to increase, indicating progress in financial performance. Peloton is also ahead of its cost-saving targets and is improving its customer acquisition efficiency, which are positive signs for its financial health.
However, despite these improvements, Anmuth anticipates muted free cash flow growth in FY26, projecting a slight decline after the gains in FY25. The challenges in returning to subscriber and revenue growth, coupled with macroeconomic uncertainties and tariff exposures, contribute to a cautious outlook. As a result, Anmuth maintains a Hold rating with a price target of $7, reflecting a balanced view of Peloton’s potential and risks.