In a report released today, John Blackledge from TD Cowen maintained a Hold rating on Peloton Interactive (PTON – Research Report), with a price target of $5.00.
John Blackledge has given his Hold rating due to a combination of factors affecting Peloton Interactive’s performance and outlook. The anticipation of mixed second-quarter results shows an expected increase in sequential revenue due to holiday sales, but a decrease in gross margins linked to a shift towards hardware sales. Despite the revenue estimate being slightly higher than management guidance, the forecast for EBITDA is somewhat lower. The stock’s historical performance, including a significant rally post-first-quarter reporting and a steep drop in the previous year, also plays into the cautious stance.
The company’s strategic initiatives, such as the brand relaunch and efforts to broaden its app-only Total Addressable Market (TAM), are noteworthy, but the stock’s valuation reflects cautious optimism amidst ongoing macroeconomic uncertainties. Key factors to watch in the upcoming report include guidance for the third quarter, updates on the path to positive Free Cash Flow (FCF), and customer engagement and retention in light of new marketing campaigns. While there is a slight year-over-year increase in connected fitness subscribers, the Hold rating suggests that the expected improvements may not be sufficient to warrant a more aggressive investment stance at this time.
In another report released on January 19, Goldman Sachs also maintained a Hold rating on the stock with a $6.50 price target.
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Peloton Interactive (PTON) Company Description:
Founded in 2012, Peloton Interactive Inc. is a New York-based exercise equipment and media company, which provides interactive fitness products such as the Peloton Bike and the Peloton Tread, for live and on-demand classes.
Read More on PTON:
- Peloton price target raised to $6.50 from $6 at Goldman Sachs
- Peloton Interactive, Inc. Announces Second Quarter Fiscal 2024 Earnings Release Date, Conference Call, and Webcast
- Peloton Interactive call volume above normal and directionally bullish
- Peloton pact with TikTok should bring return to growth, says Citi
- Unusually active option classes on open January 5th
