By Emily Dattilo
Peloton Interactive is on a track for growth and shares look like a buy, Canaccord analysts say.
Susan Anderson and Alec Legg upgraded shares of the at-home fitness company to Buy from Hold and maintained a price target of $10.
The stock gained 8.1% to $6.56 in premarket trading Friday. Shares are down more than 30% this year.
"Peloton is the clear leader in the connected fitness industry, which they invested in early on and built a 6M loyal member base that has a high-margin recurring revenue stream," the analysts wrote.
Since its early years, the company has begun a new journey to settle its cost structure, improve unit economics, boost the balance sheet, and grow again, Canaccord wrote, adding that those efforts can help propel earnings and profitability.
Analysts anticipate revenue will inflect in fiscal 2026 as management delivers on initiatives. They expect subscription growth to follow in fiscal 2027 with more product offerings.
"With Peloton's category-defining global brand potential and loyal customer base, a return to profitability and FCF, and leverage coming down, we believe Peloton is at the turning point in its journey where there is meaningful upside potential from current levels," they wrote.
Write to Emily Dattilo at emily.dattilo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 14, 2025 09:27 ET (13:27 GMT)
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