Peloton Interactive (PTON) AI Stock Analysis

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Peloton Interactive

(NASDAQ:PTON)

Rating:50Neutral

Price Target:

$6.00

▼(-8.54%Downside)

Peloton's overall stock score reflects a company facing significant financial challenges, particularly in profitability and valuation. While technical analysis shows potential for a rebound, the stock's long-term attractiveness is hindered by negative earnings and high leverage. The positive earnings call and leadership changes offer some optimism, suggesting potential strategic improvements.

Positive Factors

Growth Opportunities

Peloton's new CEO Peter Stern's growth plan targets reducing churn and achieving new subscriber growth, which could drive future success.

Marketplace Strategy

Peloton's new marketplace for refurbished equipment can drive incremental revenue by providing a trusted platform for buyers and sellers.

Valuation

Current valuation is seen as attractive with shares trading at 9x EV/EBITDA, offering potential upside as new earnings drivers are not yet priced in.

Negative Factors

Growth Levers

Exclusion of the PHIT Act likely removes a significant growth lever for Peloton, impacting its potential expansion.

Legislative Impact

Peloton shares are trading down due to HSA provisions not being included in the current Senate Bill, removing a potential growth catalyst.

Revenue Challenges

Analyst maintains a Neutral/High Risk rating while lowering the target price to $8.50, highlighting balanced risk/reward at current levels.

Peloton Interactive (PTON) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.61B

Dividend YieldN/A

Average Volume (3M)14.63M

Price to Earnings (P/E)―

Beta (1Y)2.28

Revenue Growth-6.35%

EPS Growth79.04%

CountryUS

Employees2,853

SectorConsumer Cyclical

Sector Strength56

IndustryLeisure

Share Statistics

EPS (TTM)-0.12

Shares Outstanding382,593,780

10 Day Avg. Volume13,793,041

30 Day Avg. Volume14,626,094

Financial Highlights & Ratios

PEG Ratio0.04

Price to Book (P/B)-9.03

Price to Sales (P/S)0.00

P/FCF Ratio-5.67

Enterprise Value/Market Cap1.61

Enterprise Value/Revenue0.40

Enterprise Value/Gross Profit3.40

Enterprise Value/Ebitda-8.39

Forecast

1Y Price Target

$7.86

Price Target Upside19.82% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering13

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 Interactive generates revenue through a combination of hardware sales, subscription services, and related fitness accessories. The primary revenue stream comes from the sale of its connected fitness products, notably the Peloton Bike and Peloton Tread. These products are sold directly to consumers through the company's website and retail showrooms. Another significant source of income is Peloton's subscription services, which offer access to live and on-demand fitness classes. Customers can choose between the All-Access Membership, which is tied to Peloton equipment, or the standalone Digital Membership that can be used without the hardware. Additionally, Peloton earns revenue from the sale of branded fitness apparel and accessories. Strategic partnerships, such as collaborations with fitness influencers and technology integrations, also play a role in enhancing Peloton's market presence and driving subscriber growth.

Peloton Interactive Key Performance Indicators (KPIs)

Any

Connected Fitness Subscribers

Connected Fitness Subscribers
Tracks the number of subscribers to Peloton's fitness services, indicating customer base growth and recurring revenue potential.

Chart InsightsPeloton's Connected Fitness Subscribers have plateaued, with recent declines reflecting challenges in subscription growth and macroeconomic pressures. Despite these hurdles, the latest earnings call highlights strategic wins, such as improved unit economics and strong engagement in new workout content. The company exceeded guidance on key metrics, achieving positive EBITDA and free cash flow, indicating resilience. However, the decline in connected fitness product revenue and subscription revenue remains a concern, suggesting that Peloton must continue innovating and optimizing to sustain growth in a competitive market.

Data provided by:

Main Street Data

Peloton Interactive Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q3-2025)

% Change Since: -6.02%|

Next Earnings Date:Aug 21, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Peloton's success in exceeding guidance on key metrics, improving service quality, and achieving cost reductions. However, there were challenges in connected fitness product revenue and subscription growth, alongside concerns about macroeconomic impacts. Overall, the sentiment was positive, with significant achievements in profitability and strategic improvements outweighing the challenges.

Q3-2025 Updates

Positive Updates

Exceeded Guidance on Key Metrics

Peloton performed at the high end of or above guidance on key metrics, including slightly growing Paid Connected Fitness subscriptions and delivering significantly positive adjusted EBITDA and free cash flow.

Strong Engagement and Innovation

Peloton reported Net Promoter Scores above 70 for all cardio hardware products, with Tread exceeding 80. Engagement metrics showed 5% YoY growth in running workouts and 11% growth in walking workouts.

Improvement in Service and Support

Service and repair MSAT improved by 5% QoQ and 7% YoY. Member support MSAT improved by 1% QoQ and 20% YoY.

Successful Cost Reduction

Peloton continues to track ahead of its $200 million cost restructuring plan, leading to meaningful profitability improvement.

Positive Free Cash Flow and EBITDA

Generated $95 million of free cash flow and $89 million in adjusted EBITDA in Q3, marking the fifth consecutive quarter of positive figures.

International and Retail Growth

International markets saw growth in paid connected fitness subscriptions. Positive results from micro-store tests and Amazon sales events.

Negative Updates

Decline in Connected Fitness Products Revenue

Connected Fitness products revenue decreased by 27% YoY due to lower sales and deliveries across all product categories.

Challenges in Subscription Growth

Subscription revenue decreased by 4% YoY, driven by lower paid connected fitness and app subscriptions.

Macro-economic Concerns

Concerns about macroeconomic factors impacting demand for connected fitness hardware, given their higher ticket nature.

Company Guidance

During Peloton's third quarter fiscal year 2025 earnings call, the company shared its strong performance, exceeding guidance on key metrics. They slightly increased Paid Connected Fitness subscriptions and improved unit economics, achieving significantly positive adjusted EBITDA and free cash flow. Peloton reported a 5% year-over-year growth in running workouts and an 11% increase in walking workouts, with a noteworthy engagement of over 80% in Tread users utilizing the Pace Targets feature. The company also highlighted a 7% year-over-year increase in meditation class participation and the successful launch of new kettlebell content, with nearly 70,000 members completing kettlebell workouts by the end of the quarter. Peloton's Net Promoter Scores for all cardio hardware products were above 70, with Tread exceeding 80. Additionally, they observed improvements in service and repair member satisfaction scores, which rose by 5% quarter-over-quarter and 7% year-over-year. Peloton's financial performance was robust, with a total revenue of $624 million, and they raised their full-year guidance for fiscal year 2025, reflecting an increase in expected free cash flow to approximately $250 million.

Peloton Interactive Financial Statement Overview

Summary

Peloton's financial performance is challenged by declining revenue and profitability, as evidenced by negative profit margins and high leverage. Despite improvements in cash flow management, the company's negative equity and revenue trends pose significant financial risks.

Income Statement

Neutral

Peloton's income statement shows a consistent decline in revenue from 2021 to TTM (Trailing-Twelve-Months), with a negative revenue growth trend. Gross profit margin has improved in TTM compared to previous years, but net profit margins remain negative, indicating ongoing profitability challenges. EBIT and EBITDA margins also remain negative, although there is a slight improvement in EBITDA margin in TTM.

Balance Sheet

Negative

The balance sheet indicates high leverage with a significant debt-to-equity ratio due to negative stockholders' equity, posing a financial risk. The equity ratio is negative, reflecting more liabilities than assets. However, the company maintains a steady level of cash and short-term investments.

Cash Flow

Neutral

Recent TTM data shows a positive free cash flow, a significant improvement from previous periods, indicating better cash management. The operating cash flow to net income ratio suggests effective cash generation relative to net income losses. However, historical free cash flow growth has been negative.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	2.53B	2.70B	2.80B	3.58B	4.02B	1.83B
Gross Profit	1.24B	1.21B	923.60M	698.40M	1.45B	836.80M
EBITDA	58.70M	-330.80M	-1.04B	-2.53B	-119.60M	-26.20M
Net Income	-171.10M	-551.90M	-1.26B	-2.82B	-189.00M	-71.70M
Balance Sheet
Total Assets	2.06B	2.19B	2.77B	4.04B	4.49B	2.98B
Cash, Cash Equivalents and Short-Term Investments	914.30M	697.60M	813.90M	1.25B	1.61B	1.75B
Total Debt	1.99B	2.08B	2.36B	2.37B	1.51B	555.10M
Total Liabilities	2.56B	2.70B	3.06B	3.44B	2.73B	1.30B
Stockholders Equity	-491.30M	-519.10M	-295.20M	603.70M	1.75B	1.68B
Cash Flow
Free Cash Flow	237.30M	-85.80M	-470.00M	-2.36B	-491.90M	220.00M
Operating Cash Flow	248.60M	-66.10M	-387.60M	-2.04B	-239.70M	376.40M
Investing Cash Flow	-7.10M	26.80M	-69.90M	171.00M	-585.10M	-741.30M
Financing Cash Flow	-121.30M	-94.40M	76.80M	2.02B	916.80M	1.24B

Peloton Interactive Technical Analysis

Technical Analysis Sentiment

Negative

Last Price6.56

Price Trends

50DMA

6.65

Negative

100DMA

6.91

Negative

200DMA

7.16

Negative

Market Momentum

MACD

-0.10

Positive

RSI

46.65

Neutral

STOCH

29.52

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PTON, the sentiment is Negative. The current price of 6.56 is below the 20-day moving average (MA) of 6.91, below the 50-day MA of 6.65, and below the 200-day MA of 7.16, indicating a bearish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 46.65 is Neutral, neither overbought nor oversold. The STOCH value of 29.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PTON.

Peloton Interactive Risk Analysis

Peloton Interactive disclosed 72 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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OSW	74 Outperform	$2.02B	31.21	12.80%	0.81%	9.80%	89.42%
LTH	73 Outperform	$6.40B	30.42	8.24%	―	18.58%	169.49%
YETI	71 Outperform	$2.51B	14.62	25.01%	―	8.38%	3.69%
PLNT	71 Outperform	$8.88B	50.02	-79.88%	―	10.32%	20.44%
Sector *	61 Neutral	C$5.15B	10.80	18.94%	4.18%	5.08%	6.52%
PTON	50 Neutral	$2.61B	―	58.47%	―	-6.35%	79.04%
XPOF	45 Neutral	$375.02M	―	22.27%	―	-3.17%	-194.72%

* Consumer Cyclical Sector Average

Performance Comparison

PTON

Peloton Interactive

6.56

3.12

90.70%

PLNT

Planet Fitness

105.48

31.56

42.69%

YETI

Yeti Holdings

30.31

-9.00

-22.89%

OSW

OneSpaWorld Holdings

19.63

4.57

30.35%

XPOF

Xponential Fitness

7.73

-7.77

-50.13%

LTH

Life Time Group Holdings

29.15

10.18

53.66%

Peloton Interactive Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Peloton Interactive Announces Leadership Changes in April 2025

Positive

Apr 9, 2025

On April 9, 2025, Peloton Interactive announced significant leadership changes, appointing Charles Kirol as Chief Operating Officer effective April 14, 2025. Kirol, with over 25 years of experience in supply chain and business transformations, is expected to enhance Peloton’s operational excellence and cost management. Concurrently, Andrew Rendich will transition from Chief Supply Chain Officer to an advisory role, ensuring a smooth transition of responsibilities. Additionally, Dion Camp Sanders has been named Chief Commercial Officer, emphasizing Peloton’s focus on growth and member engagement through expanded channels and improved service experiences.

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.Date of analysis: Jun 18, 2025