Once, when gyms were shut down by government mandate, Peloton (NASDAQ:PTON) proved it was a force to be reckoned with, producing some really impressive exercise machines. Now, it’s little more than an old joke on “The Simpsons” and a rapidly declining company. The stock, meanwhile, lost about 4% in Tuesday afternoon’s trading thanks to an analyst pivot.
This time, the pivot comes from Lee Horowitz, an analyst with Deutsche Bank, which dropped Peloton’s rating from Buy to Hold. While that doesn’t mean that Deutsche Bank stopped being bullish on Peloton entirely, there are concerns about the overall ability of Peloton to grow from here. All it can offer is exercise machines and streaming video classes for said exercise machines. Anything else Peloton can do is little more than a refinement of what it’s already done, which is likely to limit Peloton’s growth ability down the line.
Yet, Peloton is not taking this assessment lying down and is turning back to its marketing efforts to try and drive new life into the business. The company that gave us the “wife workout” ad almost four years ago to the day is now giving us “Work Out Your Way.” The ad is intended to portray “…fitness as a fun vibe,” according to Oli Snoddy, Peloton’s vice president of consumer marketing. By extension, of course, that means Peloton as a fun vibe. Whether or not it will work—or become another lightning rod for controversy—remains to be seen.
Is Peloton a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on PTON stock based on six Buys, 16 Holds, and three Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PTON price target of $7.53 per share implies 55.58% upside potential.
