“What a difference a day makes.” That old saw certainly applies to exercise equipment maker and former pandemic darling Peloton (NASDAQ:PTON). Its shares were surging upward nicely yesterday, but today find themselves losing ground as analysts start getting especially concerned about bankruptcy potential. Peloton was down over 3% in Friday afternoon’s trading.
The troubles for Peloton kicked off when Canaccord Genuity revised its rating on Peloton, via analyst Michael Graham. Graham lowered Peloton from Buy to Hold, noting that Peloton’s post-pandemic slump is taking longer than expected to pivot, and there are still concerns about its ability to get subscribers in for its live classes. Given those were supposed to be the focus of Peloton’s future revenue streams—now that most folks who wanted a Peloton actually have one—that’s bad news. Another analyst revealed that Peloton’s fundamentals themselves were souring, with sales dropping, cash flow drying up, and its working capital in open decline as well.
There’s more to Peloton than classes, though. Rental subscriptions are proving a bright spot, as 54,000 rental subscriptions are already in play in Canada and the U.S. Peloton hopes to grow that number to 75,000 by the end of this year. Reports note it’s also looking to bring the Tread+ back out; previously recalled over several injuries and one child’s death, the Tread+ is facing a much harsher economic climate now than it was. But Peloton still hopes that it can drive at least some new sales, numbers the company needs sorely.
What is the Prediction for Peloton Stock?
Turning to Wall Street, analysts have a Hold consensus rating on PTON stock based on six Buys, 15 Holds and three Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PTON price target of $7.51 per share implies 43.05% upside potential.
