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Peloton Interactive (PTON)
NASDAQ:PTON
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Peloton Interactive
(NASDAQ:PTON)
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Rating:54Neutral
Price Target:
$4.00
▼(-3.15% Downside)
Action:ReiteratedDate:03/18/26
The score is driven primarily by improving fundamentals (stronger margins, positive cash generation, and ongoing deleveraging) and a generally constructive earnings outlook for profitability and free cash flow. Offsetting this are continued revenue/subscriber pressure, a still-stressed balance sheet with negative equity, and weak technical trends with the stock below key long-term moving averages.
Positive Factors
Cash generation
Peloton’s operating and free cash flow turned meaningfully positive across 2025 and the TTM, producing several hundred million annually. Durable cash generation enhances financial flexibility, funds continued debt paydown, supports investments in product/content, and reduces refinancing risk over multiple quarters.
Margin expansion & profitability
Sustained gross margin expansion and a move to slightly positive EBIT reflect structural improvements in pricing, product mix, and cost control. Higher margins increase operating leverage and the ability to fund marketing and content, improving the sustainability of profits even if top-line growth lags.
Content & member leadership hire
Hiring a seasoned fitness/brand executive to lead content and member development is a structural management upgrade. Her mandate to boost engagement and outcomes targets higher retention and lifetime value, which are durable drivers of subscription revenue and monetization over multiple quarters.
Negative Factors
Weak balance sheet (negative equity)
Negative stockholders’ equity is a persistent structural weakness that limits Peloton’s financial flexibility and increases creditor sensitivity. Even with lower absolute debt, negative equity raises refinancing, covenant and strategic risk and constrains large investments or aggressive M&A for the foreseeable quarters.
Subscriber contraction
A 7% YoY decline in paid connected subscriptions is a durable headwind to recurring revenue. Shrinking subscriber counts weaken subscription gross profit, reduce cross‑sell and upgrade opportunities, and force a greater reliance on hardware promotions or price increases to stabilize revenue longer term.
Hardware reliance & execution risks
Peloton’s dependence on hardware upgrade cycles and third‑party retail performance creates structural revenue volatility. Lower equipment sales, longer upgrade intervals, and delivery/activation timing issues make it harder to grow subscriptions and smooth revenue, pressuring long‑term recovery pacing.
Peloton Interactive (PTON) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.76B
Dividend YieldN/A
Average Volume (3M)14.72M
Price to Earnings (P/E)―
Beta (1Y)2.42
Revenue Growth-8.74%
EPS Growth74.66%
CountryUS
Employees2,853
SectorConsumer Cyclical
Sector Strength84
IndustryLeisure
Share Statistics
EPS (TTM)-0.09
Shares Outstanding409,652,370
10 Day Avg. Volume10,063,393
30 Day Avg. Volume14,724,521
Financial Highlights & Ratios
PEG Ratio0.28
Price to Book (P/B)-6.54
Price to Sales (P/S)1.09
P/FCF Ratio8.36
Enterprise Value/Market Cap1.62
Enterprise Value/Revenue1.16
Enterprise Value/Gross Profit2.25
Enterprise Value/Ebitda16.83
Forecast
1Y Price Target
$7.00Price Target Upside69.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)0.15
Revenue Forecast (FY)$2.43B
Peloton Interactive Business Overview & Revenue Model
Company DescriptionPeloton Interactive, Inc. provides interactive fitness products in North America and internationally. It offers connected fitness products with touchscreen that streams live and on-demand classes under the Peloton Bike, Peloton Bike+, Peloton Tread, and Peloton Tread+ names. The company also provides connected fitness subscriptions for various household users, and access to various live and on-demand classes, as well as Peloton Digital app for connected fitness subscribers to provide access to its classes. As of June 30, 2021, it had approximately 5.9 million members. The company markets and sells its interactive fitness products directly through its retail showrooms and at onepeloton.com. Peloton Interactive, Inc. was founded in 2012 and is headquartered in New York, New York.
How the Company Makes MoneyPeloton primarily makes money through two revenue streams: (1) Connected Fitness Products and (2) Subscription revenue. Connected Fitness Products revenue comes from selling its branded connected hardware (e.g., Bike/Bike+, Tread, Row) and related accessories/apparel through direct-to-consumer channels (its website and retail/showrooms) and, where applicable, other distribution arrangements; this revenue is recognized when products are delivered/fulfilled, and it is influenced by hardware pricing, promotions, financing offers, returns, and warranty-related costs. Subscription revenue comes from recurring fees paid by members for access to Peloton’s fitness content and platform features. This includes subscriptions tied to Peloton connected equipment (typically providing access for the household/device to live and on-demand classes and other features) as well as standalone app subscriptions for users without Peloton hardware. Subscription revenue is generally recognized over time as the service is provided and is driven by the size of the subscriber base, subscription pricing/tiers, churn, and engagement. Additional contributors to revenue can include ancillary items such as delivery/installation fees (where charged), accessories and apparel sales, and commercial/partner arrangements where Peloton content or equipment is placed in third-party settings; specific partners and terms vary over time.
Peloton Interactive Key Performance Indicators (KPIs)
Any
Connected Fitness Subscribers
Tracks the number of subscribers to Peloton's fitness services, indicating customer base growth and recurring revenue potential.
Tracks the number of subscribers to Peloton's fitness services, indicating customer base growth and recurring revenue potential.
Data provided by:
The Fly
The FlyPeloton Interactive Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call highlights substantial progress on profitability, margins, deleveraging, and cash generation — evidenced by a 39% YoY increase in adjusted EBITDA, meaningful margin expansion, a 52% reduction in net debt, raised EBITDA and free cash flow targets, and encouraging product and engagement signals (Peloton IQ adoption, cross-training launch, commercial growth). However, revenue and subscriber growth remain challenged in the near term: equipment sales to existing members missed expectations, ending subscriptions were down 7% YoY, delivery delays and third-party retail softness impacted results, and full-year revenue guidance implies a modest decline. On balance, the company shows a strong financial and operational recovery trajectory while still working to reaccelerate top-line growth.Q2-2026 Updates
Positive Updates
Improved Profitability and Margin Expansion
Adjusted EBITDA of $81M in Q2, up $23M or 39% year over year and $6M above the high end of guidance. Q2 total gross margin of 50.5%, up 320 basis points year over year and 150 basis points above guidance; raising full-year gross margin guidance to ~53% (up 100 bps from prior guidance and +210 bps YoY).
Subscription Margin and Pricing Benefit
Subscription gross margin of 72.1% in Q2 (benefited from a $9.7M reduction to accrued music royalties); excluding that one-time benefit, subscription margin would be 69.7% (+180 bps YoY), with ~100 bps driven by subscription price increases net of churn.
Strong Cash and Deleveraging Progress
Unrestricted cash and cash equivalents of $1.18B (up $76M quarter over quarter). Net debt reduced by $351M YoY (-52%) to $319M. Gross leverage improved to 3.6 (from 6.2 YoY) and net leverage to 0.8 (from 2.9 YoY).
Raised Profitability Guidance and Free Cash Flow Target
Full-year adjusted EBITDA guidance raised to $450M–$500M (up $25M vs prior guidance; midpoint +18% YoY). Full-year minimum free cash flow target raised by $25M to at least $275M.
Solid Subscription Resilience and Churn Control
Ending paid Connected Fitness subscriptions of 2,661,000 (6,000 above midpoint of guidance). Average net monthly paid Connected Fitness subscription churn of 1.9% in Q2 (+50 bps YoY) but lower than expected following the subscription price increase, indicating stronger-than-expected retention.
Growing Member Engagement and Peloton IQ Adoption
Workout time per connected fitness subscription increased 7% YoY. Peloton IQ engaged 46% of active members in its first quarter since rollout; all-access member engagement with personalized plans up >10% from Q1. Peloton IQ ranked the most compelling feature among purchasers of cross-training series premium models.
Successful Product Refresh and Positive Reviews
Launched cross-training series, hardware portfolio refresh, Peloton IQ, and new instructors ahead of holiday season. Reviewers (WSJ, Men’s/Women’s Health, PCMag) praised the product reinvention; cross-training sales skewed toward plus line features (camera, form feedback).
Commercial Business Momentum
Commercial business unit revenue grew 10% year over year in Q2, exceeding expectations across U.S. and international markets; management highlights a healthy pipeline and dedicated commercial-grade product roadmap (Peloton Pro series).
Retail Efficiency with MicroStores
Scaled retail footprint to 10 microstores by October; MicroStores drove higher average sales than legacy showrooms and generated more than 8x legacy showroom sales per square foot, indicating improved capital-efficient retail performance.
Strategic Partnerships and Health Outcomes
Partnerships with Twin Health and ReSpin Health (menopause study) showed member health impact: ReSpin program reported 84% of participants experienced overall symptom improvement. Events (F1 partnership) drove +10% brand sentiment and +11% purchase intent.
Negative Updates
Revenue Miss and Guidance Reduction
Q2 total revenue came in $8M below guidance. Full-year FY26 revenue guidance reduced by $30M to $2.40B–$2.44B, implying a 3% year-over-year decline at the midpoint.
Equipment Sales Shortfall to Existing Members
Primary reason for the Q2 revenue shortfall was fewer-than-expected equipment sales to existing members (longer upgrade cycle than anticipated). Connected fitness products revenue was $244M (down $9M or 4% YoY).
Decline in Subscription and Ending Subscriber Base
Ending paid Connected Fitness subscriptions declined 7% year over year to 2,661,000, and subscription revenue decreased $8M or 2% YoY (partly offset by subscription price increases contributing a partial quarter benefit).
Delivery Delays and Activation Timing
Longer-than-expected delivery times delayed approximately $4M of Q2 revenue recognition into Q3 and contributed to lower-than-expected gross additions; management noted activation timing and holiday delays as factors.
Third-Party Retail Underperformance
Sales through third-party retail channels lagged expectations in Q2, offsetting stronger first-party sales; company is working with distribution partners to improve performance.
One-Time and Restructuring Charges
Recognized $26M of impairment and restructuring expenses in Q2 (approximately $24M noncash), related to rightsizing corporate office footprint and workforce actions tied to the $100M run-rate cost savings plan.
Free Cash Flow Year-over-Year Decline and Timing Effects
Q2 free cash flow was $71M but declined $35M year over year (partly because last year had a larger inventory tailwind). Q2 included roughly $25M of timing benefits; results subject to timing variability.
Tariff Exposure and Cost Headwinds
Company expects roughly a $45M headwind from tariff exposure for the year; management noted increases in tariff import charges and inventory reserves impacted product gross margin partially.
Subscriber Growth Headwinds Expected
Guidance reflects flat net churn for full-year FY26 and expects gross additions to decrease year over year due to lower equipment sales, implying continued headwinds in growing subscriber base near term.
CFO Departure and Organizational Changes
CFO announced departure to pursue another opportunity; company is conducting a comprehensive search for a successor. Additionally, recent headcount reductions were implemented (part of the previously announced $100M savings plan), which may create short-term execution risk and media attention.
Company Guidance
Peloton guided fiscal 2026 total revenue of $2.40–$2.44 billion (down $30M from prior guidance; midpoint ≈ −3% YoY) and Q3 revenue of $605–$625 million (Q3 midpoint ≈ −1% YoY, −6% QoQ); it raised full‑year total gross margin to ~53% (+100 bps vs prior; +210 bps YoY) and expects Q3 gross margin of ~54% (+300 bps YoY). Full‑year adjusted EBITDA was raised to $450–$500 million (+$25M vs prior; ~+18% YoY at midpoint) with Q3 adjusted EBITDA of $121–$135 million (≈+43% YoY at midpoint; +57% QoQ). Q3 ending paid Connected Fitness subscriptions are guided to 2.65–2.675 million (≈ −8% YoY at midpoint); net churn is expected to improve (net churn roughly flat YoY for FY) while gross additions are expected to decline. Management raised minimum free cash flow to ≥$275 million (+$25M), assumes a roughly $45 million tariff impact, expects full‑year positive operating income, plans to pay down roughly $200 million of 0% convertibles, and noted a 1% prepayment penalty on the $1.0 billion term loan through May 2026.Peloton Interactive Financial Statement Overview
Summary
Cash flow has improved materially (strong positive operating cash flow and free cash flow in 2025 and TTM) and profitability/margins have recovered versus prior years, but revenue is still contracting sharply and the capital structure remains stressed with negative equity despite reduced debt.Income Statement
Profitability has improved materially versus prior years: gross margin expanded from ~19% (2022) to ~51–52% (2025), and results moved from deeply negative EBIT/EBITDA in 2022–2024 to slightly positive EBIT in TTM (Trailing-Twelve-Months). However, the top line remains under pressure with revenue declining (TTM revenue growth of -71% and negative growth in recent annual periods), and net income is still slightly negative in TTM, indicating the turnaround is not yet fully established.52
Neutral
Balance Sheet
The balance sheet is a key weak point: stockholders’ equity is negative in recent periods (2023–TTM), which reduces financial flexibility and makes leverage risk more acute. Total debt remains sizable (about $1.0B in TTM, down from ~ $2.4B in 2022–2023), showing progress on deleveraging, but negative equity still signals an elevated risk profile despite improving operating performance.28
Negative
Cash Flow
Cash generation has turned meaningfully positive: operating cash flow is strong in 2025 and TTM (~$333.0M annual; ~$357.6M TTM) and free cash flow is also solid (~$323.7M annual; ~$345.4M TTM). This is a major improvement from negative operating and free cash flow in 2021–2024, though recent free cash flow growth is volatile (TTM shows a sharp decline vs the prior comparison), suggesting cash performance may not be linear quarter-to-quarter.74
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.44B | 2.49B | 2.70B | 2.80B | 3.58B | 4.02B |
| Gross Profit | 1.26B | 1.27B | 1.21B | 927.20M | 698.40M | 1.45B |
| EBITDA | 168.70M | 108.60M | -330.40M | -648.80M | -2.62B | -119.60M |
| Net Income | -50.90M | -118.90M | -551.90M | -1.26B | -2.83B | -189.00M |
Balance Sheet | ||||||
| Total Assets | 2.16B | 2.13B | 2.19B | 2.77B | 4.03B | 4.49B |
| Cash, Cash Equivalents and Short-Term Investments | 1.18B | 1.04B | 697.60M | 813.90M | 1.25B | 1.61B |
| Total Debt | 2.33B | 1.98B | 2.08B | 2.36B | 2.37B | 1.51B |
| Total Liabilities | 2.49B | 2.54B | 2.70B | 3.06B | 3.44B | 2.73B |
| Stockholders Equity | -326.70M | -413.70M | -519.20M | -295.20M | 592.90M | 1.75B |
Cash Flow | ||||||
| Free Cash Flow | 345.40M | 323.70M | -85.80M | -470.00M | -2.36B | -491.90M |
| Operating Cash Flow | 357.60M | 333.00M | -66.10M | -387.60M | -2.02B | -239.70M |
| Investing Cash Flow | -14.40M | -5.10M | 26.80M | -69.90M | 153.30M | -585.10M |
| Financing Cash Flow | -4.90M | 1.70M | -94.40M | 76.80M | 2.02B | 916.80M |
Peloton Interactive Technical Analysis
Neutral
4.13
Price Trends
5.01
Negative
5.91
Negative
6.64
Negative
Market Momentum
-0.29
Negative
46.36
Neutral
50.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PTON, the sentiment is Neutral. The current price of 4.13 is above the 20-day moving average (MA) of 3.99, below the 50-day MA of 5.01, and below the 200-day MA of 6.64, indicating a neutral trend. The MACD of -0.29 indicates Negative momentum. The RSI at 46.36 is Neutral, neither overbought nor oversold. The STOCH value of 50.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PTON.
Peloton Interactive Risk Analysis
Peloton Interactive disclosed 74 risk factors in its most recent earnings report. Peloton Interactive reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Peloton Interactive Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $19.50B | 13.49 | 39.78% | ― | 8.76% | 3.41% | |
62 Neutral | $5.93B | 41.35 | -82.94% | ― | 14.39% | 31.64% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
54 Neutral | $1.76B | -16.60 | 12.90% | ― | -8.74% | 74.66% | |
51 Neutral | $1.11B | -24.17 | 60.90% | 2.51% | 3.88% | 34.36% | |
47 Neutral | $279.65M | -2.45 | ― | ― | -3.55% | -111.90% |
* Consumer Cyclical Sector Average
PTON
Peloton Interactive
4.13
-2.33
-36.07%
LULU
Lululemon Athletica
159.27
-163.80
-50.70%
PLNT
Planet Fitness
74.05
-24.67
-24.99%
LUCK
Lucky Strike Entertainment
8.05
-1.29
-13.77%
XPOF
Xponential Fitness
5.71
-3.29
-36.56%
Peloton Interactive Corporate Events
Business Operations and StrategyExecutive/Board Changes
Peloton Names New Content Chief to Drive Member Growth
Positive
Mar 17, 2026
On March 17, 2026, Peloton announced that Chief Content Officer Jen Cotter will step down from her executive role at the close of business on March 31, 2026, moving into a non‑executive advisory position through August 16, 2026 to support a smooth handover. Under a transition agreement, Cotter will receive salary continuation, certain bonus, equity and benefit arrangements, and extended option exercise periods, with all payments tied to standard covenants and a release of claims, underscoring an orderly and non‑contentious leadership change.
The company simultaneously appointed veteran fitness and brand executive Sarah Robb O’Hagan as Chief Content and Member Development Officer effective April 1, 2026, tasking her with accelerating innovation across Peloton’s content ecosystem and member engagement. Drawing on prior leadership roles at EXOS, Gatorade, Equinox, Flywheel Sports and other major fitness and sports brands, her appointment is positioned as central to Peloton’s strategy to evolve from connected fitness to broader connected wellness and to drive a return to sustainable, profitable revenue growth.
The most recent analyst rating on (PTON) stock is a Hold with a $4.00 price target. To see the full list of analyst forecasts on Peloton Interactive stock, see the PTON Stock Forecast page.
Executive/Board Changes
Peloton Appoints Interim CFO Amid Leadership Transition
Neutral
Mar 12, 2026
Peloton Interactive, Inc. announced on March 11, 2026, that Chief Accounting Officer Saqib Baig will become interim Chief Financial Officer effective March 27, 2026, succeeding CFO Liz Coddington, who will step down the same day to pursue an external opportunity. Baig, who has led Peloton’s controllership, reporting, SOX compliance, and since August 2025 served as CFO of its Commercial Business Unit, brings over 25 years of global finance experience, and the company emphasized that his appointment involves no special arrangements or related-party relationships.
The leadership change consolidates key finance responsibilities under an executive already overseeing core financial operations, signaling a continuity-focused transition in Peloton’s finance organization. By elevating an internal leader with senior roles at Meta Platforms, Inc. in accounting risk and financial reporting, Peloton seeks to maintain stability in its financial reporting and governance structure during the CFO transition period.
The most recent analyst rating on (PTON) stock is a Hold with a $3.50 price target. To see the full list of analyst forecasts on Peloton Interactive stock, see the PTON Stock Forecast page.
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Peloton Reports Improved Profitability as CFO Plans Exit
Neutral
Feb 5, 2026
On February 5, 2026, Peloton announced that Chief Financial Officer Liz Coddington will step down effective March 27, 2026, to pursue an external opportunity, with the company emphasizing that her departure is unrelated to any financial reporting or accounting issues and that she will not receive severance under its existing plans as it launches a comprehensive search for her successor. Also on February 5, 2026, Peloton reported fiscal second-quarter 2026 results for the period ended December 31, 2025, showing a 7% year-over-year decline in paid Connected Fitness subscriptions to 2.661 million and a 3% drop in revenue to $657 million, but improved profitability with total gross margin rising to 50.5% and Adjusted EBITDA increasing 39% to $81 million, driven by operational discipline and a slate of product and content innovations including the new Cross Training Series, the Peloton Pro Series for commercial clients, and the AI-powered Peloton IQ; the company also raised its full-year Adjusted EBITDA guidance and projected further margin and profitability gains in the third quarter despite continued revenue and subscription softness, underscoring a strategic shift toward higher-margin growth and deeper member engagement.
The most recent analyst rating on (PTON) stock is a Hold with a $5.50 price target. To see the full list of analyst forecasts on Peloton Interactive stock, see the PTON Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.