5 Peloton Analysts Break Down Q1 Sales Miss From Pandemic Stock Favorite

Peloton Interactive Inc PTON Thursday reported its quarterly results, missing earnings by a wide margin. Here's what the Street has to say. 

Morgan Stanley On Peloton Interactive

Analyst Lauren Schenk maintained an Equal-Weight rating while lowering the price target from $8 to $5.

“PTON delivered sequentially better F1Q results, but F2Q/FY23 EBITDA and connected fitness (CF) expectations are disappointing relative to restructuring actions taken and new distribution models,” Schenk wrote in a note.

“Weaker demand trends despite new 3P partnerships, rental, and pre-owned initiatives lead us to materially lower our terminal revenue assumptions, and thus cash flow, of the business,” she said. 

Telsey Advisory Group On Peloton Interactive

Analyst Dana Telsey reiterated a Market Perform rating while maintaining a $9 price target. 

“Peloton is making progress reducing costs, which drove a lower than expected EBITDA loss in 1QF23, as well as a reduced cash burn,” Telsey said in a note. “Inventory also declined 7% from the prior quarter,” she added.

Demand “remains a problem,” with both fiscal first-quarter reported revenues and second-quarter revenue guidance falling short of expectations, Telsey said.

Check out other analyst stock ratings.

BMO Capital Markets On Peloton Interactive

Analyst Simeon Siege maintained an Underperform rating while reducing the price target from $8.50 to $8.

“PTON’s 2Q was delivered with improved management tone and guide-down that we believe triggered a sense of "all clear" for some investors,” Siege stated.

“Conversely, we continue to see eroding engagement (believe pro forma churn was worse than feared, total 'Subs' declined for first time, implied workouts continued to decline, and music-related-charge questions engagement, to name a few),” the analyst said. 

Needham On Peloton Interactive

Analyst Bernie McTernan reaffirmed a Buy rating with an unchanged $14 price target. 

“Despite only modestly worse than expected revenue in 1Q, PTON reset the revenue bar significantly lower with their 2Q guidance and implied FY guide with commentary they are expecting similar seasonality to last year,” McTernan said.

“While waiting for end markets to return or green shoot growth initiatives to take hold the major value driver for shares will be the company's ability to reset costs lower,” he added.

JMP Securities On Peloton Interactive

Analyst Andrew Boone reaffirmed a Market Outperform rating with a $16 price target. 

“While we acknowledge the limited revenue visibility and that Peloton is a highly discretionary purchase in an increasingly difficult consumer environment, with shares trading at 2.4x our annualized 1Q23 subscription revenue and a clear path toward positive EBITDA and FCF, in our view, we would be buyers of shares as we continue to believe Peloton offers a best-in-class connected fitness experience,” Boone wrote in a note.

PTON Price Action: Shares of Peloton Interactive were trading 0.21% higher at $9.36 Friday morning. 

Photo courtesy of Peloton.