Peloton stock forecast: posing as the biggest stock price loss?
Built on the premise of revolutionising boutique fitness from within the comforts of one’s home, Peloton (PTON) was launched in 2013 and has its headquarters in New York City.
In recent times, there has been a growing community of people who want to achieve their fitness goals while balancing their personal and professional lives. Using state-of-the-art technology and streaming content, Peloton promised to provide exactly that.
In April 2019, British newspaper The Independent referred to Peloton as the future of fitness and the best way to workout from home. In January 2022, Peloton had a community of more than 6.2 million active members, according to its website, making it the largest interactive fitness platform in the world at the time.
The American media and exercise equipment company’s primary product offering is internet-connected stationary bicycles and treadmills. Through a strong network of content and technology, the brand offers its subscribers remote participation in virtual classes through streaming media. These classes span across various fitness and wellness disciplines, such as yoga, meditation, bootcamps and strength training.
Peloton historical price
On 26 September 2019, Peloton made its debut on the Nasdaq with an opening share price of $27. Falling by 8.3% to an intraday low of $24.75, the stock ultimately closed 4.59% lower at $25.76 on its first day.
In 2020, Covid-induced lockdowns saw product sales shooting up, and simultaneously Peloton stock projection also started looking up. The Peloton stock recorded its highest closing price of $165.25 as of 14 January 2021.
However, it would continue to fall throughout the year, reaching a low of $83.81 on 7 May 2021, before rebounding above the $100 mark at the end of that month. PTON hit another downtrend in September, falling drastically to end the year at $35.
Things did not improve for the company in 2022, and as of 26 August the share price has fallen 71% year-to-date (YTD) to $10.20.
In this article, we catch up on the latest PTON news and get analyst comments on the PTON stock forecast.
PTON stock fundamental analysis
On 25 August, the company announced its Q4 financial results for the fiscal year 2022, reporting net losses of $1.24bn – a significant increase from the loss of $313.2m in Q4 2021, and nearly $500m higher than in Q3 2022.
Peloton reported quarterly revenues of $678.7m, a 27.5% year-over-year (YOY) decrease from Q4 2021 revenues of $936.9m, and a 29.6% decrease from the Q3 2022 $964.3m revenue.
On its Connected Fitness subscription front, the company experienced steady growth to 2.96 million. Compared with 2.33 million subscriptions in Q4 2021, this important metric for the company increased by 27%.
That being said, the Connected Fitness workouts have reduced since Q3 this year. As a direct impact of the global economies recovering and people returning to offices, Peloton experienced a 20% decline in its quarterly fitness workouts.
Playing controversy’s favourite child?
Only a few months after receiving a cold response on its Nasdaq debut, the Peloton stock fell by approximately 15% within a span of four trading days in December 2019. The cause of this was found to be a holiday commercial with a tagline of ‘The gift that gives back’. The 30-second advert shows a woman, already seemingly ‘fit’ by conventional standards, whose husband gives her a Peloton bike for Christmas. Fast-forward to a year later, she claims that she didn’t realise how much this gift would change her.
The advertisement received a lot of backlash from the public, with some claiming it was sexist while others just felt confused by the commercial. A spokesperson for the company said:
With the backdrop of all the criticism, from a close price of $36.84 on 2 December 2019, the stock closed at $31.31 on 5 December 2019, reporting a 15.01% fall.
In May 2021 Peloton was caught up in another controversy after the death of a six-year-old child in the United States, who was pulled under the machine. Peloton had to recall 125,000 treadmills in the US and was criticised for not responding to the incident more swiftly.
On 9 December 2021, in the reboot episode of American sitcom Sex and the City, one of the main characters was killed off after his workout on a Peloton bike. A day after the episode premiered, Peloton stock fell by 5.38%. From a closing price of $40.7 on 9 December 2021, the stock closed at $38.51 a day later.
Peloton quickly swung into damage control mode, launching a commercial soon after the infamous episode. The commercial resurrected the same ‘dead’ character from the series, and cheekily reiterated the benefits of regular cycling – a better moment for Peloton’s public relations and advertising team.
Future stock price forecasts
Covid-19 and the global lockdowns it caused adversely impacted almost all business sectors. However, for a home-based exercise equipment company like Peloton, this was good news. With home gyms becoming increasingly popular during the lockdowns, sales for Peloton’s products soared. With the world fully in recovery from Covid-19, what lies ahead for the exercise company?
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, wrote in a note:
Based on the data compiled by Market Beat as of 26 August, 17 out of 31 analysts rated PTON a ‘buy’, 15 suggested to ‘hold’ and one recommended ‘sell’. The consensus 12-month PTON share-price forecast target was $33.45, varying from a low of $9.75 to a high of $120. The current analyst price target consensus has an upside of 219%, based on the last closing price of $11.01.
According to the algorithmic forecasting of Wallet Investor, the PTON stock price could decline to $5.039 by October 2022.
On 26 August, following the release of Peloton’s quarterly finance results, JP Morgan lowered PTON’s price target from $20 to $18 but maintained its ‘overweight’ rating. Goldman Sachs also cut Peloton’s price target from $18 to $17 while maintained its ‘neutral’ rating. Lastly, Credit Suisse maintained its ‘neutral’ rating but readjusted its price target to $13 from $12.
When looking for Peloton stock price forecasts, it’s important to bear in mind that analysts’ forecasts and price targets can be wrong. An analyst’s Peloton stock analysis is based on making fundamental and technical studies of the stock’s performance. Past performance is no guarantee of future results.
FAQs
Is PTON a good stock to buy?
According to data compiled by Market Beat based on 33 analysts, 17 rated the PTON stock a ‘buy’, 15 suggested to ‘hold’ and one recommended ‘sell’.
However, whether PTON is a good investment for you or not will depend on your portfolio composition, investment goals and risk profile, among other factors. Different trading strategies will suit different investment goals with short or long-term focus. You should do your own research and never invest money you cannot afford to lose.
Will the PTON stock go up or down?
According to algorithm-based application, Wallet Investor, the share price for PTON stock could potentially decline to $5.039 by October 2022.
However, analysts’ forecasts can be wrong and have been innacurate in the past. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
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