Peloton’s (PTON) latest earnings report has caused its shares to soar almost 50% over two days after the fitness equipment manufacturer saw its revenue grow for the first time in 10 quarters and slashed losses by 88%. Despite the excitement, Wall Street is remaining cautious as Peloton focuses more on profitability rather than growth, which some expect will lead to more revenue drops going forward.
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Interestingly, even J.P. Morgan’s five-star analyst, Doug Anmuth, who had been one of Peloton’s biggest supporters, downgraded the stock to Neutral. He pointed out that the company’s outlook for getting back to revenue growth is still murky, especially as the economy slows down.
Even though Peloton’s new focus on cutting costs has been welcomed, there is still worry about whether the company can keep growing in the long run. Analysts like BMO’s four-star analyst, Simeon Siegel, praised the cost cuts but stressed that Peloton needs to act quickly because subscription revenues are shrinking and customer churn is rising. As a result, Peloton’s turnaround is still pretty uncertain.
What Is the Forecast for PTON Stock?
Turning to Wall Street, analysts have a Hold consensus rating on PTON stock based on three Buys, 15 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 10% decline in its share price over the past year, the average PTON price target of $4.14 per share implies 16.28% downside risk.
