Peloton (PTON) Stock Forecast & Price Target

Peloton Interactive Inc is forecasting a modest sales increase to $2.49 billion for FY26, while significantly raising its adjusted EBITDA guidance to between $425 million and $475 million, indicating strong operational performance. The company has reported an impressive year-over-year improvement in segment gross margins and a healthy subscription gross margin of 68.6%, reflecting ongoing engagement growth, which has seen average monthly workout time increase by 5% year-over-year. Additionally, Peloton's commercial segment has shown strength driven by recent innovations, and the projected inflection to revenue growth indicates a positive trajectory for the company moving forward.

Peloton Interactive Inc. reported a decline in both Connected Fitness Product revenues and subscription revenues, with year-over-year decreases of 4.5% and 6.5%, respectively, signaling a potential weakness in consumer demand. The company's gross profit margin fell to 51.5%, below consensus expectations of 53.1%, while Connected Fitness' gross margin plummeted to 6.9%, a significant drop influenced by a recent product recall. Guidance for revenue suggests a 2% year-over-year decline, with expectations for connected fitness subscribers to decrease further due to increased churn related to membership fee hikes.