Education
About Us
Working with TipRanks
Follow Us
Peloton Interactive (PTON)
NASDAQ:PTON
Top Page
Peloton Interactive
(NASDAQ:PTON)54Neutral
Positive Factors
Financial Performance
Peloton's better-than-expected FY2Q25 results highlight improving engagement, unit economics, and profitability that sets the stage for a return to growth.
Partnerships and Sales Channels
Peloton's new Costco partnership drove more Bike+ sales than any other third-party retail partner, highlighting the benefit of expanded sales channels.
Negative Factors
Market Growth Concerns
There is a fear that the total addressable market will be significantly lower than management expectations, indicating potential risks ahead.
Peloton Interactive (PTON) vs. S&P 500 (SPY)
Market Cap
$2.42B
Dividend YieldN/A
Average Volume (3M)16.78M
Price to Earnings (P/E)―
Beta (1Y)2.88
Revenue Growth-3.99%
EPS Growth68.27%
CountryUS
Employees2,918
SectorConsumer Cyclical
Sector Strength53
IndustryHotels, Lodging & Leisure
Share Statistics
EPS (TTM)-0.78
Shares Outstanding373,898,680
10 Day Avg. Volume14,624,094
30 Day Avg. Volume16,782,420
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.92
Price to Cash Flow (P/CF)5.70
P/FCF Ratio5.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.17Price Target Upside63.77% Upside
Rating ConsensusHold
Number of Analyst Covering17
Peloton Interactive Business Overview & Revenue Model
Company DescriptionPeloton Interactive, Inc. is a leading interactive fitness platform that combines cutting-edge technology with engaging workout experiences. Founded in 2012 and headquartered in New York City, Peloton is known for its innovative stationary bikes and treadmills that allow users to participate in live and on-demand fitness classes streamed from its studios. The company operates in the fitness and wellness sector, providing a subscription-based model that offers a variety of classes including cycling, running, yoga, and strength training, catering to a diverse fitness audience.
How the Company Makes MoneyPeloton makes money through a dual revenue model comprising hardware sales and subscription services. The company generates significant income from selling its high-end exercise equipment, such as the Peloton Bike and Tread, which are equipped with screens for streaming workouts. In addition to one-time hardware sales, Peloton's subscription model is a key revenue stream, offering users access to a wide array of live and on-demand classes for a monthly fee. This subscription service not only enhances user engagement but also provides a recurring revenue stream. Peloton also benefits from apparel sales and strategic partnerships that enhance its brand visibility and reach.
Peloton Interactive Financial Statement Overview
Summary
Peloton faces significant financial hurdles with negative profitability, high debt levels, and a lack of equity. Although cash flow shows signs of recovery, the company needs to address its profitability issues and debt burden to establish a stable financial footing. The lack of equity is a critical concern, reflecting potential solvency risks. Peloton must continue to improve its operational efficiency and manage its liabilities to ensure long-term sustainability.Income Statement
Peloton's income statement shows significant challenges with profitability. The gross profit margin for the TTM (Trailing-Twelve-Months) stands at 46.4%, which indicates a moderate ability to cover direct costs. However, the company struggles with negative net profit margins, with a TTM net income of -$290.7 million, highlighting ongoing losses. Although there are improvements in EBIT and EBITDA margins from the previous year, they remain negative, indicating continued operational challenges.45
Neutral
Balance Sheet
The balance sheet reveals a precarious financial position. Peloton's total debt is significantly higher than its stockholders' equity, leading to a negative equity situation. This high leverage poses a risk to financial stability. The absence of stockholders' equity in the most recent report suggests potential solvency issues. The equity ratio is uncalculable due to the lack of equity, reflecting a weak capital structure.30
Negative
Cash Flow
The cash flow statement shows some positive aspects, with operating cash flow turning positive in the TTM at $163.5 million, suggesting improvements in cash-generating capability. The free cash flow is also positive at $151.3 million, indicating effective cash management. Despite these improvements, the company still faces challenges with the operating cash flow to net income ratio, as net income remains negative.55
Neutral
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.62B | 2.70B | 2.80B | 3.58B | 4.02B | 1.83B | Gross Profit |
| 1.22B | 1.21B | 923.60M | 698.40M | 1.45B | 836.80M | EBIT |
| -176.00M | -529.00M | -1.20B | -1.64B | -187.90M | -80.90M | EBITDA |
| -60.00M | -330.80M | -1.04B | -2.53B | -119.60M | -26.20M | Net Income Common Stockholders |
| -290.70M | -551.90M | -1.26B | -2.82B | -189.00M | -71.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 829.00M | 697.60M | 813.90M | 1.25B | 1.61B | 1.75B | Total Assets |
| 2.11B | 2.19B | 2.77B | 4.04B | 4.49B | 2.98B | Total Debt |
| 2.03B | 2.08B | 2.36B | 2.37B | 1.51B | 555.10M | Net Debt |
| 1.20B | 1.38B | 1.55B | 1.12B | 377.30M | -480.40M | Total Liabilities |
| 2.61B | 2.70B | 3.06B | 3.44B | 2.73B | 1.30B | Stockholders Equity |
| -497.20M | -519.10M | -295.20M | 603.70M | 1.75B | 1.68B |
| Cash Flow | Free Cash Flow | ||||
| 151.30M | -85.80M | -470.00M | -2.36B | -491.90M | 220.00M | Operating Cash Flow |
| 163.50M | -66.10M | -387.60M | -2.04B | -239.70M | 376.40M | Investing Cash Flow |
| 23.90M | 26.80M | -69.90M | 171.00M | -585.10M | -741.30M | Financing Cash Flow |
| -107.20M | -94.40M | 76.80M | 2.02B | 916.80M | 1.24B |
Peloton Interactive Technical Analysis
Negative
6.21
Price Trends
8.45
Negative
8.28
Negative
6.08
Positive
Market Momentum
-0.56
Positive
28.54
Positive
8.84
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PTON, the sentiment is Negative. The current price of 6.21 is below the 20-day moving average (MA) of 8.26, below the 50-day MA of 8.45, and above the 200-day MA of 6.08, indicating a neutral trend. The MACD of -0.56 indicates Positive momentum. The RSI at 28.54 is Positive, neither overbought nor oversold. The STOCH value of 8.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PTON.
Peloton Interactive Risk Analysis
Peloton Interactive disclosed 72 risk factors in its most recent earnings report. Peloton Interactive reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Peloton Interactive Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
86 Outperform | $43.70B | 24.87 | 46.21% | ― | 10.84% | 76.07% | |
76 Outperform | $2.95B | 17.39 | 24.01% | ― | 10.32% | 6.05% | |
63 Neutral | $8.24B | 48.51 | -79.88% | ― | 10.30% | 23.45% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
54 Neutral | $2.42B | ― | 58.47% | ― | -3.99% | 68.27% | |
52 Neutral | $2.91B | ― | -6.12% | ― | -7.47% | -131.70% | |
39 Underperform | $113.34M | ― | -122.20% | ― | -20.29% | -729.53% |
* Consumer Cyclical Sector Average
Performance Comparison
PTON
Peloton Interactive
6.21
1.50
31.85%
GPRO
GoPro
0.74
-1.60
-68.38%
LULU
Lululemon Athletica
344.36
-113.40
-24.77%
UA
Under Armour
6.44
-1.49
-18.79%
PLNT
Planet Fitness
97.31
34.06
53.85%
YETI
Yeti Holdings
35.75
-2.74
-7.12%
Peloton Interactive Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -18.07% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
Peloton's earnings call highlighted significant improvements in financial metrics, subscription retention, and cost savings. However, challenges in retail sales and hardware sales were noted. Overall, the positive developments in financial and operational performance suggest a strong recovery trajectory.Highlights
Improved Financial Metrics
Peloton achieved a 12.9% Connected Fitness Products gross margin, marking the first time in over 3 years it reached double digits. Adjusted EBITDA and free cash flow both increased roughly $140 million year-over-year.
Strength in Subscription Business
Net Promoter Scores for Peloton increased across all Bike and Tread products to over 70, with average net monthly paid connected fitness subscription churn at 1.4%, showcasing strong subscription retention.
Successful Marketing Campaigns
The 'Find Your Power' marketing campaign targeting men increased the proportion of male Connected Fitness subscription gross additions by 280 basis points quarter-over-quarter.
Progress in Cost Savings
Peloton is on track to exceed $200 million in run rate cost savings by the end of fiscal '25, with a significant reduction in operating expenses and media spend.
Free Cash Flow and Debt Reduction
Peloton generated $106 million of free cash flow in Q2, with net debt decreasing by $280 million or 30% year-over-year.
Lowlights
Decrease in Paid Connected Fitness Subscriptions
Peloton experienced a net decrease of 21,000 paid connected fitness subscriptions in the quarter, although this was better than their guidance.
Challenges in Third-Party Retail Sales
Third-party retail sales were lower than expected, partly due to lower promotional discounts on the original Bike compared to last year.
Lower Hardware Sales
There were slightly lower hardware unit sales, with a higher mix of Tread portfolio sales, which have lower new subscription attachment rates than Bike products.
Company Guidance
During the Peloton Interactive Q2 2025 earnings call, significant guidance was provided, showcasing the company's strategic focus and financial outlook. Peloton emphasized its commitment to achieving fiscal 2025 financial and operating goals, with a particular emphasis on innovation and improved member outcomes. The company reported 2.88 million paid connected fitness subscriptions, a 1.4% churn rate, and a net decrease of 21,000 in the quarter. Subscription revenue was $421 million, comprising 62% of total revenue, while Connected Fitness Products gross margin reached 12.9%, marking the first double-digit figure in over three years. The company achieved a total gross margin of 47.2% and adjusted EBITDA of $58 million. Peloton is on track to exceed $200 million in cost savings by the end of fiscal 2025. The guidance also included a raised target for fiscal 2025 free cash flow to at least $200 million, reflecting improvements in operating expense reductions and inventory-related efficiencies. The company's strategic initiatives include enhancing unit economics, expanding into new markets, and deepening member connections, with a long-term growth strategy set to be unveiled as the calendar year progresses.Peloton Interactive Corporate Events
Executive/Board Changes
Peloton Interactive Strengthens Leadership with New Director
Positive
Jan 17, 2025
On January 16, 2025, Peloton Interactive appointed Peter Stern, the CEO and President, as a Class II director on its Board of Directors. This appointment signifies a consolidation of leadership roles, potentially enhancing strategic decision-making and stability within the company’s governance structure.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.