+ 0.70
+ 0.47%

Hedgeye Thinks Peloton's Stock Is Going To Drop Another 50%

December 18, 2019 12:33 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Hedgeye Thinks Peloton's Stock Is Going To Drop Another 50%

Hedgeye Risk Management co-founder Brian McGough said Wednesday there’s plenty more downside to come for Peloton Interactive Inc (NASDAQ:PTON).

McGough said Hedgeye will be releasing a report at 2 p.m. Wednesday making his bearish case against Peloton.

"We're presenting our case today at 2pm as to why $PTON either should never have gone public, or picked the wrong strategy. Either way we get to $2bn-$4bn cap vs $9.5bn today. Once the lockup expires in March, watch out…" McGough said in a tweet.

A $2 billion to $4 billion market cap implies a price target range of between around $7 and $14 for Peloton shares.

Left Weighs In

McGough isn't the only high-profile Peloton bear to issue an aggressive price target this month. On Dec. 10, Citron Research editor and notorious short seller Andrew Left said Peloton is headed to $5 by the end of 2020.

Left said the stock's $15,631 in enterprise value per subscriber is astronomically high compared to its peers and compared Peloton to GoPro Inc (NASDAQ:GPRO) back in 2014, a stock that is down 92.6% in the past five years.

Left admitted to owning a Peloton bike and said his bearish take on the stock has nothing to do with the quality of the product or the company and is simply a reflection of his take on the stock’s valuation.

“The takeaway is clear. Peloton at $10BN or even $5BN makes zero sense,” Left wrote.

Benzinga’s Take

High-profile tech IPOs haven’t performed particularly well in 2019, including Uber Technologies Inc (NYSE:UBER), Lyft Inc (NASDAQ:LYFT) and Slack Technologies Inc (NYSE:WORK). So far, Peloton shares are up 12.5% overall from its IPO price, but McGough seems to be suggesting a significant amount of insider selling could be coming along with the lock-up expiration in March.

Peloton's stock traded down 2.8% to $31.98 per share at time of publication.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

Related Links:

Citron Thinks Peloton's Stock Is Going To $5, Compares It To GoPro

Everybody Hates The Peloton Ad, But Stock Is Doing Just Fine Since The IPO

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to Benzinga Podcasts and our YouTube channel.

Related Articles

Citron Research Makes The Case For Apple Acquiring Sonos: 'Undisputed Leader'

The case for Apple Inc. (NASDAQ: AAPL) acquiring smart speaker maker Sonos Inc (NASDAQ: SONOS) is simple: "home is the new sanctuary," according to Citron Research's Andrew Left. read more

Citron Thinks Peloton's Stock Is Going To $5, Compares It To GoPro

A Group Of Investors Is On A Mission To Help Traders Give Back Through Charity

A Sampling Of Citron's Most Influential Tweets