Peloton (PTON) Stock Forecast & Price Target

Peloton Interactive Inc. has demonstrated a robust performance with a gross margin of 47.2%, reflecting a significant year-over-year increase and outperforming guidance expectations, driven by a strong subscription gross margin. The company's revenue model is projected to shift favorably as the percentage of gross profit from subscriptions is expected to rise from approximately 35% to 60% over time, highlighting the growing importance of its Subscription segment, which currently generates the majority of revenue. Additionally, Peloton's improvements in marketing efficiency and unit economics have substantially lifted profitability, illustrated by a 23% increase in FY25 adjusted EBITDA guidance, suggesting a positive trajectory for the company’s financial health.

Peloton Interactive Inc. has faced significant revenue declines, with connected fitness product sales dropping 21% year-over-year to $253 million, alongside a 1% decrease in subscription revenue to $421 million, indicating challenges in maintaining growth across both key segments. Furthermore, the company's forecast suggests a continued downward trend in connected fitness subscribers, projected to decline by 7% in FY'25, with no anticipated return to growth until FY'29. Despite a slight improvement in leverage ratios and lower churn rates, these financial indicators suggest persistent underlying issues that contribute to a negative outlook for the company's stock performance.