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Truist Securities has maintained its buy rating and $11.00 price target on Peloton Interactive (NASDAQ:PTON), currently trading at $7.32, citing expectations that revenue growth will turn positive in the second half of fiscal 2026 for the first time since 2021. According to InvestingPro data, the stock has shown remarkable resilience with a 97% return over the past year, despite high price volatility. The firm’s analysis suggests the fitness company has restructured its balance sheet and significantly reduced operating expenses to ensure sustainable free cash flow profitability.
Truist’s tracking of card data indicates that Peloton’s revenue for the fiscal fourth quarter ending June 30 is currently aligned with consensus estimates through June 9. With current revenue at $2.53 billion and a gross profit margin of 49.5%, the company’s subscription business now accounts for approximately two-thirds of its total revenue, providing a more stable revenue foundation.
Peloton’s management is expected to provide guidance for fiscal year 2026 in early August, which Truist anticipates will be relatively flat overall. This projection implies positive year-over-year revenue growth in the second half of the fiscal year, marking a significant turning point for the company.
The research firm highlighted that Peloton’s new leadership team is now "squarely focused on improving the customer experience to drive revenue growth" following the completion of financial restructuring efforts. This strategic shift represents a transition from cost-cutting to growth initiatives.
Truist values Peloton at 1.6 times sales and 11.4 times adjusted EBITDA, describing the stock as "virtually de-risked with compelling upside" given its improving profitability metrics and current valuation levels. InvestingPro analysis indicates the stock is currently fairly valued, with additional insights available in the comprehensive Pro Research Report, which offers deep-dive analysis of this and 1,400+ other US stocks.
In other recent news, Peloton Interactive announced new leadership appointments, naming Megan Imbres as Chief Marketing Officer and promoting Francis Shanahan to Chief Technology Officer. These changes are expected to enhance Peloton’s marketing and technology strategies, with Imbres bringing experience from companies like Apple (NASDAQ:AAPL) and Netflix (NASDAQ:NFLX), and Shanahan focusing on AI innovation. UBS maintained a Neutral rating on Peloton, with a $7.50 target, citing slight improvements in EBITDA due to cost savings, although they forecast flat revenue for FY’26. Citi also maintained a Neutral rating but lowered its price target to $8.50, acknowledging improvements in churn rates and EBITDA margins but expressing caution due to the early stage of growth initiatives. Macquarie, however, raised its price target to $10, giving Peloton an Outperform rating after the company exceeded revenue and subscriber guidance in the third quarter. Peloton’s adjusted EBITDA for the quarter was $89.4 million, surpassing both company guidance and consensus estimates. Telsey Advisory Group reduced its price target to $8 while maintaining a Market Perform rating, noting profitability gains but expressing concerns over subscriber trends and consumer spending on high-priced items. Despite the varied analyst perspectives, Peloton’s strategic initiatives and financial adjustments continue to draw attention.
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