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Peloton Interactive (PTON)
NASDAQ:PTON
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Peloton Interactive
(NASDAQ:PTON)
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Rating:52Neutral
Price Target:
$4.00
▼(-0.99% Downside)
Action:ReiteratedDate:02/06/26
The score is driven by improving fundamentals—stronger margins, positive cash generation, and debt reduction—reinforced by raised profitability and free-cash-flow guidance on the latest call. These positives are weighed down by continued revenue and subscriber declines, a stressed balance sheet with negative equity, and bearish technicals (downtrend across moving averages with negative MACD).
Positive Factors
Margin expansion & profitability
Material margin expansion to ~50–53% is durable because it reflects structural changes: higher subscription mix, pricing, and lower hardware cost pressure. Sustained higher gross margins support ongoing profitability, resilience to revenue variability, and stronger free cash flow generation over the next several quarters.
Improved cash generation & deleveraging
Meaningful positive operating cash flow and free cash flow, plus a >50% YoY net debt reduction, materially improve financial flexibility. Consistent cash generation enables convertible paydown, reduces refinancing risk, and funds reinvestment or margin initiatives over the medium term.
Product innovation driving engagement
Rapid adoption of Peloton IQ and positive reviews for new cross‑training hardware signal stronger product-market fit. Higher engagement drives retention and monetization, supporting subscription margin sustainability and making future upsells and commercial placements more durable drivers of recurring revenue.
Negative Factors
Declining subscribers & revenue
A shrinking subscriber base and downgraded revenue guidance threaten the recurring revenue foundation. Even with higher margins, persistent subscriber declines reduce lifetime value, limit scale economics, and force elevated marketing or promotion to arrest churn over the next several quarters.
Negative equity & balance sheet weakness
Negative equity signals prior capital impairment and constrains financial flexibility despite improving metrics. It raises the company's vulnerability to shocks, could limit access to unsecured capital, and keeps refinancing and covenant risk elevated while the firm continues deleveraging.
Execution, channel & cost headwinds
Leadership turnover, restructuring charges, tariff exposure and third‑party retail underperformance create multi‑front execution risk. These structural headwinds can depress equipment sales, complicate delivery and margins, and make near‑term topline recovery and consistent cash flow more uncertain.
Peloton Interactive (PTON) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.72B
Dividend YieldN/A
Average Volume (3M)14.36M
Price to Earnings (P/E)―
Beta (1Y)2.39
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. Volume12,134,937
30 Day Avg. Volume14,355,357
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 Cap1.63
Enterprise Value/Revenue1.15
Enterprise Value/Gross Profit2.22
Enterprise Value/Ebitda16.62
Forecast
1Y Price Target
$7.00Price Target Upside73.27% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 generates revenue primarily through two key streams: the sale of fitness equipment and subscription services. The company's hardware offerings, including its Peloton Bike, Bike+, and Tread, contribute significantly to its revenue when sold directly to consumers. Once customers purchase the equipment, they are encouraged to subscribe to Peloton's All-Access Membership, which provides access to its vast library of live and on-demand fitness classes. This subscription model is a recurring revenue stream that has proven to be highly valuable, as it fosters customer loyalty and promotes long-term engagement. Additionally, Peloton has formed strategic partnerships with various fitness and wellness brands, enhancing its market presence and potentially opening new revenue avenues. The combination of hardware sales and subscription services positions Peloton as a formidable player in the fitness industry.
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
Operating and cash-flow trends have improved materially (gross margin ~51–52% and TTM EBIT slightly positive; operating cash flow and free cash flow are solidly positive), and debt has come down. Offsetting this, revenue is contracting sharply and equity remains negative, keeping financial risk elevated and the turnaround less secure.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
Negative
4.04
Price Trends
5.76
Negative
6.54
Negative
6.87
Negative
Market Momentum
-0.50
Positive
29.00
Positive
37.92
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 4.04 is below the 20-day moving average (MA) of 4.92, below the 50-day MA of 5.76, and below the 200-day MA of 6.87, indicating a bearish trend. The MACD of -0.50 indicates Positive momentum. The RSI at 29.00 is Positive, neither overbought nor oversold. The STOCH value of 37.92 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 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $21.97B | 12.53 | 41.02% | ― | 8.76% | 3.41% | |
64 Neutral | $6.88B | 31.56 | ― | ― | 14.39% | 31.64% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
52 Neutral | $1.72B | -31.64 | ― | ― | -8.74% | 74.66% | |
52 Neutral | $401.27M | -5.00 | ― | ― | -3.55% | -111.90% | |
51 Neutral | $1.16B | -12.39 | ― | 2.51% | 3.88% | 34.36% |
* Consumer Cyclical Sector Average
PTON
Peloton Interactive
4.04
-3.84
-48.73%
LULU
Lululemon Athletica
179.49
-186.54
-50.96%
PLNT
Planet Fitness
82.61
-8.01
-8.84%
LUCK
Lucky Strike Entertainment
8.42
-2.14
-20.28%
XPOF
Xponential Fitness
8.23
-5.46
-39.88%
Peloton Interactive Corporate Events
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.
Executive/Board ChangesShareholder Meetings
Peloton Stockholders Approve Key Proposals at Annual Meeting
Neutral
Dec 15, 2025
On December 9, 2025, Peloton Interactive held its Annual Meeting of Stockholders virtually, where stockholders voted on two key proposals. The election of three Class III directors for a term expiring in 2028 was approved, and the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending June 30, 2026, was ratified.
The most recent analyst rating on (PTON) stock is a Hold with a $6.50 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.