Peloton (PTON) Stock Forecast & Price Target

Peloton Interactive Inc. is experiencing significant year-over-year expansion in its segment gross margins, reflecting the company's expectations of positive revenue growth in fiscal year 2026. The company has raised its adjusted EBITDA guidance to a range of $425 - $475 million, indicating stronger financial performance and effective cost management strategies, including a favorable tariff outlook. With a robust cash position of $1.1 billion and an anticipated gross margin expansion of 180 basis points, Peloton is positioned for a potential revenue growth of 0.2% year-over-year, demonstrating resilience in its subscription-driven business model.

Peloton Interactive Inc. has seen a decline in both Connected Fitness Product revenues, down 4.5% year-over-year, and Subscription revenues, which fell by 6.5% year-over-year, indicating a troubling trend in its core business segments. Additionally, the company reported a gross profit margin of 51.5%, which fell short of consensus expectations, alongside a significant dip in Connected Fitness' gross margin to 6.9%, attributing part of this decline to a product recall. The revenue guidance for FY26 suggests a projected drop of 2% year-over-year, coupled with expectations of only modest growth in adjusted EBITDA, reflecting potential challenges in sustaining profitable growth moving forward.