Hedge fund manager David Einhorn has jumped on the Peloton Interactive (PTON) bandwagon, saying that the stock of the exercise equipment maker is undervalued at current levels.
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Einhorn, who runs the hedge fund Greenlight Capital, made the comments at the Robin Hood Investors Conference on a day when PTON stock rose more than 10%. Through Greenlight Capital, Einhorn has a $6.8 million stake in Peloton, a position that was disclosed in June of this year.
Reportedly, Einhorn made a pitch for Peloton stock while riding one of the company’s stationary exercise bikes at the investor conference. Speaking to the assembled crowd, Einhorn said that PTON stock, which currently trades at a little more than $6 a share and has a market capitalization of $2.35 billion, is significantly undervalued. Although Einhorn didn’t specify at what price he thinks the stock should trade.
PTON Stock Marching Higher
Peloton’s stock has been on the rise ever since the company disclosed earlier this week that it is partnering with retail giant Costco (COST) to sell its internet-connected exercise bike through the warehouse club.
Peloton’s share price has risen 17% in the last five days, lifting it out of penny stock territory, which is defined as any security that trades for less than $5. In August of this year, PTON stock was trading for less than $3 per share. The company has been struggling with declining sales and management changes. Peloton CEO Barry McCarthy stepped down earlier this year and has yet to be replaced.
Is PTON Stock a Buy?
Peloton stock has a consensus Hold rating among 18 Wall Street analysts. That rating is based on two Buy, 15 Hold, and one Sell recommendation issued in the last three months. The average PTON price target of $5.02 implies 19.29% downside risk from current levels.
