Peloton Interactive is reportedly grappling with a decline in revenue and growth forecasts.
UBS analysts, led by Arpine Kocharyan, have revised the fitness equipment and digital media company’s price target from $8 to $4 due to mounting uncertainty surrounding Peloton’s subscription growth, Seeking Alpha reported Monday (Sept. 25).
Data from July revealed a negative trend in total interactive visits to the Peloton website, following positive trends in May and June, according to the report. Moreover, August data indicated further weakness. UBS analysts suggest that promotional activities during slower months and ahead of a new app launch may have temporarily inflated metrics in June.
Peloton’s stock has taken a significant hit, declining by 45% year to date, with quarterly sales plummeting by 50% from their pandemic-era highs, the report said. This sales decline has prompted downgrades from multiple firms following the company’s recent earnings report, which provided guidance well below expectations.
During the company’s Aug. 23 earnings call, Peloton reported a loss that exceeded expectations and a reduction in new quarterly subscribers. The company cited the recall of its bike seat post and seasonal patterns as the driving factors.
For the quarter ended on June 30, Peloton posted a net loss of $241.8 million, in contrast to the loss of $1.26 billion in the same period previously. Revenues also declined to $642.1 million, marking a decrease of $678.8 million compared to the previous year.
In May, Peloton CEO Barry McCarthy cautioned that the upcoming fourth quarter would present growth challenges. However, this was the first time the company forecasted a decrease in subscribers, PYMNTS reported. The quarter closed with 3.08 million subscribers — a 4% rise over the previous year but a 29,000-subscriber decline compared to the preceding quarter.
One way in which the company is working to grow is by finding a new channel. Peloton announced Aug. 17 the launch of Peloton for Business, a new B2B offering designed to meet customers “anywhere and anytime.”
The offering is described as a unified portfolio of B2B well-being solutions for enterprise clients that are being distributed across seven key verticals, including hospitality, corporate wellness, multifamily residential, education, healthcare, gyms and community wellness.
Peloton had already inked a deal to put 5,800 of its stationary exercise bikes in Hilton Hotels in the U.S., U.K., Germany and Canada.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More