Peloton Interactive (PTON) AI Stock Analysis

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Peloton Interactive

(NASDAQ:PTON)

Rating:57Neutral

Price Target:

$7.50

▼(-0.92%Downside)

Peloton's overall stock score reflects a challenging financial position mitigated by positive technical momentum and strategic improvements highlighted in the earnings call. Leadership changes further support a moderately optimistic outlook, though financial risks remain a concern.

Positive Factors

Customer Acquisition

Peloton is more efficiently acquiring customers, with 3QFY S&M spend -37% Y/Y and PTON’s LTV/CAC ratio improving 30%+ Y/Y and reaching slightly above ~2x.

Financial Performance

Churn rates improving materially, adoption of newer modalities ramping, and expanding EBITDA and FCF margins show progress at Peloton.

Strategic Leadership

The appointment of a new CEO, Peter Stern, and his full growth strategy is seen as a key catalyst for the stock.

Negative Factors

Growth Outlook

Alternative datapoints continue to question the medium-term growth outlook with an implied subscriber deceleration.

Market Demand

Subscriptions were largely flat sequentially and hardware sales remain under pressure, highlighting the challenges in reigniting demand from new customers.

Topline Growth

The topline growth outlook continues to face meaningful headwinds.

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

Market Cap

$3.02B

Dividend YieldN/A

Average Volume (3M)13.97M

Price to Earnings (P/E)―

Beta (1Y)2.34

Revenue Growth-6.35%

EPS Growth79.04%

CountryUS

Employees2,853

SectorConsumer Cyclical

Sector Strength73

IndustryLeisure

Share Statistics

EPS (TTM)-0.12

Shares Outstanding382,593,780

10 Day Avg. Volume16,222,864

30 Day Avg. Volume13,973,387

Financial Highlights & Ratios

PEG Ratio-0.32

Price to Book (P/B)-5.29

Price to Sales (P/S)0.00

P/FCF Ratio16.85

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$7.86

Price Target Upside3.83% 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 active subscribers to Peloton’s fitness services, indicating market penetration 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: 8.45%|

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 faces significant financial hurdles with negative profitability, high debt levels, and a lack of equity. Although cash flow shows signs of recovery, the company needs to address its profitability issues and debt burden to establish a stable financial footing. The lack of equity is a critical concern, reflecting potential solvency risks.

Income Statement

Neutral

Peloton's income statement shows significant challenges with profitability. The gross profit margin for the TTM (Trailing-Twelve-Months) stands at 46.4%, which indicates a moderate ability to cover direct costs. However, the company struggles with negative net profit margins, with a TTM net income of -$290.7 million, highlighting ongoing losses. Although there are improvements in EBIT and EBITDA margins from the previous year, they remain negative, indicating continued operational challenges.

Balance Sheet

Negative

The balance sheet reveals a precarious financial position. Peloton's total debt is significantly higher than its stockholders' equity, leading to a negative equity situation. This high leverage poses a risk to financial stability. The absence of stockholders' equity in the most recent report suggests potential solvency issues. The equity ratio is uncalculable due to the lack of equity, reflecting a weak capital structure.

Cash Flow

Neutral

The cash flow statement shows some positive aspects, with operating cash flow turning positive in the TTM at $163.5 million, suggesting improvements in cash-generating capability. The free cash flow is also positive at $151.3 million, indicating effective cash management. Despite these improvements, the company still faces challenges with the operating cash flow to net income ratio, as net income remains negative.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
2.62B	2.70B	2.80B	3.58B	4.02B	1.83B
	Gross Profit
1.22B	1.21B	923.60M	698.40M	1.45B	836.80M
	EBIT
-176.00M	-529.00M	-1.20B	-1.64B	-187.90M	-80.90M
	EBITDA
-60.00M	-330.80M	-1.04B	-2.53B	-119.60M	-26.20M
	Net Income Common Stockholders
-290.70M	-551.90M	-1.26B	-2.82B	-189.00M	-71.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
829.00M	697.60M	813.90M	1.25B	1.61B	1.75B
	Total Assets
2.11B	2.19B	2.77B	4.04B	4.49B	2.98B
	Total Debt
2.03B	2.08B	2.36B	2.37B	1.51B	555.10M
	Net Debt
1.20B	1.38B	1.55B	1.12B	377.30M	-480.40M
	Total Liabilities
2.61B	2.70B	3.06B	3.44B	2.73B	1.30B
	Stockholders Equity
-497.20M	-519.10M	-295.20M	603.70M	1.75B	1.68B
Cash Flow		Free Cash Flow
151.30M	-85.80M	-470.00M	-2.36B	-491.90M	220.00M
	Operating Cash Flow
163.50M	-66.10M	-387.60M	-2.04B	-239.70M	376.40M
	Investing Cash Flow
23.90M	26.80M	-69.90M	171.00M	-585.10M	-741.30M
	Financing Cash Flow
-107.20M	-94.40M	76.80M	2.02B	916.80M	1.24B

Peloton Interactive Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.57

Price Trends

50DMA

6.37

Positive

100DMA

7.24

Positive

200DMA

6.86

Positive

Market Momentum

MACD

0.22

Negative

RSI

64.16

Neutral

STOCH

93.51

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PTON, the sentiment is Positive. The current price of 7.57 is above the 20-day moving average (MA) of 6.78, above the 50-day MA of 6.37, and above the 200-day MA of 6.86, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 64.16 is Neutral, neither overbought nor oversold. The STOCH value of 93.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YETI	75 Outperform	$2.44B	14.23	25.01%	―	8.38%	3.69%
OSW	74 Outperform	$1.90B	29.14	12.80%	0.65%	9.80%	89.42%
LTH	74 Outperform	$6.32B	30.06	8.24%	―	18.58%	169.49%
PLNT	64 Neutral	$8.87B	49.98	-79.88%	―	10.32%	20.44%
Sector *	62 Neutral	$6.84B	11.23	3.09%	3.95%	2.66%	-25.23%
PTON	57 Neutral	$3.02B	―	58.47%	―	-6.35%	79.04%
XPOF	50 Neutral	$407.53M	―	22.27%	―	-3.17%	-194.72%

* Consumer Cyclical Sector Average

Performance Comparison

PTON

Peloton Interactive

7.57

4.58

153.18%

PLNT

Planet Fitness

102.52

40.99

66.62%

YETI

Yeti Holdings

30.19

-9.16

-23.28%

OSW

OneSpaWorld Holdings

19.26

4.28

28.57%

XPOF

Xponential Fitness

9.15

-0.35

-3.68%

LTH

Life Time Group Holdings

28.80

13.16

84.14%

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

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.