Baird Equity Research started coverage of Peloton Interactive, Inc. PTON with a bullish rating, citing a large potential market and disruptive platform.
The Analyst
Baird’s Jonathan Komp initiated coverage of Peloton with an Outperform rating and $28 price target.
The Thesis
Komp cited “very positive” customer satisfaction ratings for the newly public Peloton — with more than 60% of users saying they "love" the product — and said he sees substantial long-term sales and profit upside. (See his track record here.)
The analyst acknowledged that Peloton’s late September IPO was disappointing; the stock is off more than 15% from its $29 IPO price.
As the company invests, it may prove difficult to achieve profitability in the first few years, Komp said.
At the same time, Peloton has a large addressable market and could capture a $5-billion-plus revenue opportunity by fiscal 2024, he said.
"PTON possesses substantial long-term sales/profit upside."
Price Action
Peloton shares were trading 6.55% higher at $24.73 at the time of publication Wednesday.
Related Links:
Peloton IPO: What You Need To Know
Photo courtesy of Peloton.
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