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Peloton Interactive (PTON)
NASDAQ:PTON
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Peloton Interactive (PTON) AI Stock Analysis

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PTON

Peloton Interactive

(NASDAQ:PTON)

Rating:50Neutral
Price Target:
$6.50
▼(-11.68% Downside)
Peloton's overall score is driven by its challenging financial performance, reflected in ongoing profitability issues and high leverage. While the earnings call provided positive guidance and strategic improvements, the negative valuation metrics and mixed technical signals temper the overall outlook.
Positive Factors
Financial Performance
Quarterly results showed improved monetization of the subscriber base, improved hardware growth and margins, and balanced operating expenses.
Profitability
Management continues to focus on profitability, leading to adjusted EBITDA being significantly higher than estimates.
Strategic Initiatives
Peloton is focusing on strategic initiatives aimed at delivering differentiated product experiences and expanding beyond fitness into elements of wellness.
Negative Factors
Revenue Guidance
Some risk to FY27 revenues, and subscriber growth is further away.
Subscriber Growth
Subs growth remains negative, hindered by macro and softness in demand.
Subscription Pricing
Uncertainty over the extent to which a subscription price increase is factored into guidance, which management did not specify and the impact to subs, revenue and margins.

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

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
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:Aug 08, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook with significant achievements in financial performance, debt reduction, and strategic innovations, despite facing challenges in subscription growth and anticipating headwinds from tariffs and costs.
Q4-2025 Updates
Positive Updates
Exceeded Financial Performance Goals
Peloton exceeded all key financial performance goals for Q4 and fiscal 2025, achieving $324 million of free cash flow, an increase of $409 million year-over-year.
Substantial Debt Reduction
The company materially deleveraged its balance sheet, reducing net debt by $343 million or 43% year-over-year.
Innovations and New Market Strategies
Peloton launched new initiatives such as Peloton Repowered for used equipment, special pricing programs for students and professionals, and opened new micro stores to expand market presence.
Strong Adjusted EBITDA Growth
Adjusted EBITDA was $140 million in Q4, a 99% improvement year-over-year.
Gross Margin Improvement
Total gross margin was 54.1%, an increase of 560 basis points year-over-year.
Negative Updates
Subscription and Revenue Decline
Ending Paid Connected Fitness subscriptions decreased 6% year-over-year, and total revenue decreased in certain segments.
Headwinds in Tariff and Cost Structure
The company anticipates tariff exposure of roughly $65 million and announced restructuring to capture $100 million in cost savings, involving workforce reductions.
Seasonal Revenue Decline Expected
Q1 total revenue is expected to decrease 9% year-over-year at the midpoint due to anticipated declines in hardware sales and subscriptions.
Company Guidance
During Peloton's Fourth Quarter Fiscal Year 2025 earnings call, the company reported exceeding its key financial performance goals for Q4 and the fiscal year. The firm generated $607 million in total revenue, surpassing its guidance by $21 million, with $199 million from Connected Fitness products and $408 million from subscription revenue. It achieved a total gross margin of 54.1%, an increase of 560 basis points year-over-year. The company also reported $324 million in free cash flow, a $409 million year-over-year increase, and reduced net debt by $343 million or 43% year-over-year. Peloton aims to capture an additional $100 million in run-rate cost savings by FY 2026 and has announced plans to expand its offerings in strength, mental well-being, sleep, and nutrition to support members' wellness journeys. The company is also focusing on increasing its global presence through new store openings and partnerships, such as the successful launch of Peloton Repowered and special pricing programs for various groups, including students and military personnel. For fiscal 2026, Peloton projects total revenue between $2.4 billion to $2.5 billion, with a total gross margin of around 51% and adjusted EBITDA between $400 million to $450 million.

Peloton Interactive Financial Statement Overview

Summary
Peloton faces ongoing profitability issues and high leverage, with negative equity and declining revenues. Despite improvements in cash flow, financial risks remain significant.
Income Statement
45
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
30
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
55
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.53B2.70B2.80B3.58B4.02B1.83B
Gross Profit1.24B1.21B923.60M698.40M1.45B836.80M
EBITDA58.70M-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 Assets2.06B2.19B2.77B4.04B4.49B2.98B
Cash, Cash Equivalents and Short-Term Investments914.30M697.60M813.90M1.25B1.61B1.75B
Total Debt1.99B2.08B2.36B2.37B1.51B555.10M
Total Liabilities2.56B2.70B3.06B3.44B2.73B1.30B
Stockholders Equity-491.30M-519.10M-295.20M603.70M1.75B1.68B
Cash Flow
Free Cash Flow237.30M-85.80M-470.00M-2.36B-491.90M220.00M
Operating Cash Flow248.60M-66.10M-387.60M-2.04B-239.70M376.40M
Investing Cash Flow-7.10M26.80M-69.90M171.00M-585.10M-741.30M
Financing Cash Flow-121.30M-94.40M76.80M2.02B916.80M1.24B

Peloton Interactive Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price7.36
Price Trends
50DMA
7.07
Positive
100DMA
6.83
Positive
200DMA
7.52
Negative
Market Momentum
MACD
0.13
Positive
RSI
47.24
Neutral
STOCH
19.07
Positive
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 7.36 is below the 20-day moving average (MA) of 7.81, above the 50-day MA of 7.07, and below the 200-day MA of 7.52, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 47.24 is Neutral, neither overbought nor oversold. The STOCH value of 19.07 is Positive, 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
$2.32B32.9613.16%0.72%8.51%31.24%
68
Neutral
$2.86B16.7723.49%3.63%-2.60%
68
Neutral
$6.14B26.898.66%17.25%93.88%
61
Neutral
$17.87B13.25-4.88%3.05%1.25%-14.67%
52
Neutral
$8.83B46.79-79.88%12.47%22.74%
52
Neutral
$409.44M22.27%-3.02%-517.53%
50
Neutral
$3.10B58.47%-7.76%79.66%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PTON
Peloton Interactive
7.36
2.79
61.05%
PLNT
Planet Fitness
101.72
22.74
28.79%
YETI
Yeti Holdings
34.65
-3.87
-10.05%
OSW
OneSpaWorld Holdings
22.36
6.94
45.01%
XPOF
Xponential Fitness
8.28
-4.25
-33.92%
LTH
Life Time Group Holdings
27.47
4.01
17.09%

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: Aug 02, 2025