Key Stats for Peloton Stock
- Price change for Peloton stock: -26%
- $PTON Share Price as of Feb. 5: $4.39
- 52-Week High: $10.25
- $PTON Stock Price Target: $9.74
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
What Happened?
Peloton (PTON) stock crashed 26% on Thursday after the company’s holiday quarter results showed shoppers aren’t willing to pay up for its new AI-powered equipment or higher subscription prices.
- The connected fitness company missed Wall Street’s revenue expectations and fell short of its own internal sales targets during what’s usually its strongest selling season.
- The weak performance raises serious questions about whether CEO Peter Stern’s product overhaul strategy is working.
- Peloton launched a revamped product lineup in October featuring AI-powered tracking cameras, 360-degree swivel screens, and hands-free controls.
- It was hoped these premium features would attract new customers and convince existing members to upgrade their equipment.
Instead, demand has been sluggish.
- Revenue came in at $656.50 million versus expectations of $675 million.
- Hardware sales totaled just $244 million, below the $253 million analysts expected. Subscription revenue also disappointed, coming in at $413 million versus expectations of $424 million.
The biggest problem?
Existing Peloton members aren’t upgrading. “We simply overestimated the rate at which existing members would want to upgrade their existing equipment to new equipment,” Stern admitted on the earnings call.
The company had expected upgrade patterns similar to when it launched the Bike+ a few years ago, but that didn’t materialize.
Looking ahead, things don’t look much better.
Peloton forecasts current-quarter revenue between $605 million and $625 million, well below the $638 million analysts expected.
The company also reported ending the quarter with 2.661 million paid subscriptions, down 7% year-over-year.
See analysts’ growth forecasts and price targets for Peloton stock (It’s free!) >>>
What the Market Is Telling Us About Peloton Stock
The brutal selloff in Peloton stock shows investors are losing patience with the turnaround story. While CEO Peter Stern acknowledged the company is making progress because “revenue declines are getting less steep,” he also admitted, “I will not be satisfied until this company is back to healthy, sustained top line growth.”
That said, there is some good news buried in the results.
- Peloton generated $81 million in adjusted EBITDA during the quarter, beating expectations of $73 million.
- The company also raised its full-year adjusted EBITDA guidance to between $450 million and $500 million, up from a prior range of $425 million to $475 million.
This shows Peloton can innovate without destroying profitability. After announcing plans to cut 11% of its workforce last week, the company is clearly committed to controlling costs.
The company also announced CFO Liz Coddington is leaving in March to pursue opportunities outside the industry.
One bright spot is the commercial business unit, which grew revenue 10% during the quarter. This includes commercial versions of Peloton equipment marketed to hotels, apartment buildings, corporate wellness centers, and country clubs. It’s a small part of the business today, but it could become a meaningful growth driver.
For investors, the big question is whether Peloton can return to growth now that profitability is improving. In an economy where value matters more than ever, convincing shoppers to spend thousands on stationary bikes and treadmills is a tough sell.
The weak response to the new AI-powered products suggests consumers aren’t seeing enough value in the premium features to justify the higher price tags.
Estimate a company’s fair value instantly (Free with TIKR) >>>
How Much Upside Does Peloton Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
