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On Monday, JMP Securities maintained its Market Perform rating on Peloton Interactive (NASDAQ:PTON) shares, indicating a neutral stance on the company’s future performance. The stock, currently trading at $6.96, has shown significant volatility with a beta of 1.95. According to InvestingPro data, three analysts have recently revised their earnings estimates upward for the upcoming period. Stifel analysts, led by Anrew Boone, have updated their long-term projections for Peloton, suggesting potential for improved financial results by fiscal year 2026.
The analysts noted that Peloton is exploring various strategies to enhance its revenue, such as testing different subscription pricing models. With current revenue at $2.62 billion and a decline of 4% over the last twelve months, these initiatives are crucial. They acknowledged that while these efforts could lead to top-line growth, they are waiting for evidence of sustained subscriber increases before adopting a more bullish outlook on the stock.
According to the JMP Securities team, the ability of Peloton to attract and retain subscribers is crucial for the company’s valuation to be reassessed favorably. InvestingPro analysis shows the company maintains a healthy current ratio of 2.06, indicating strong short-term liquidity. They believe that Peloton still has opportunities to streamline its cost structure, which could contribute to better financial health in the coming years.
The updated commentary from JMP Securities reflects a cautiously optimistic view of Peloton’s attempts to revitalize its business model. The analysts are looking for clear signs of a turnaround in subscriber numbers to support a more positive reassessment of the stock’s value.
Peloton has faced challenges in maintaining its growth momentum after an initial surge in demand during the pandemic. The company’s efforts to adjust its business strategy and pricing are closely monitored by investors seeking signs of sustainable growth.
In other recent news, Peloton Interactive has seen a series of analyst updates and financial assessments. Canaccord Genuity upgraded Peloton’s stock from Hold to Buy, setting a price target of $10.00, highlighting the company’s strong membership base and high-margin recurring revenue stream. This upgrade follows Peloton’s strategic efforts to improve its cost structure and unit economics, with expectations of a significant increase in adjusted EBITDA to $300 million-$350 million by fiscal year 2025. Conversely, Citi analysts reduced their price target from $11.00 to $10.00, maintaining a Neutral rating despite recognizing improvements in customer engagement and profitability. Citi noted Peloton’s recent product launches and stable subscription churn rate as positive developments, while also highlighting the company’s operational expense controls and projected free cash flow surpassing $200 million this fiscal year.
Needham analysts maintained a Hold rating on Peloton, acknowledging progress in unit economics but expressing concerns over the company’s revenue growth outlook. Telsey Advisory Group also maintained a Market Perform rating with a steady price target of $11.00, emphasizing Peloton’s significant beat on adjusted EBITDA and increased full-year 2025 guidance. Despite these advancements, Telsey remains cautious due to ongoing revenue pressures from restrained consumer spending on high-priced items. Overall, analysts are closely monitoring Peloton’s strategic initiatives and financial health as the company navigates the competitive landscape of interactive fitness.
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