{"id":6598,"date":"2023-05-10T04:14:38","date_gmt":"2023-05-10T08:14:38","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/a-longtime-peloton-skeptic-just-upgraded-the-stock\/"},"modified":"2023-05-10T04:14:39","modified_gmt":"2023-05-10T08:14:39","slug":"a-longtime-peloton-skeptic-just-upgraded-the-stock","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=6598","title":{"rendered":"A Longtime Peloton Skeptic Just Upgraded the Stock"},"content":{"rendered":"
\n
<\/p>\n
<\/p>\n
<\/div>\n<\/figure><\/div>\n

\n Peloton Interactive
\n shares closed higher on Monday after the analyst who correctly predicted the firm\u2019s postpandemic growing pains finally raised his call on the stock from Underperform.<\/p>\n

BMO Capital Markets analyst Simeon Siegel raised his Peloton rating to Market Perform from Underperform and maintained a $9.50 price target in a Monday morning note. He pointed to the firm\u2019s latest quarterly report, which included an outlook forecasting a dip in connected fitness subscribers. Connected fitness subscribers pay $44 a month to access classes and features on Peloton\u2019s bikes, treadmills, and rowing machines. <\/p>\n

\n

\u201cWith PTON\u2019s first negative Subscriber guidance behind us, we believe shares reflect concerns and we believe that, after all this time, the Risk\/Reward has shifted, even seeing a likely upward skew at current levels,\u201d he wrote.<\/p>\n

Siegel downgraded the shares to Underperform on April 20, 2020, predicting that equipment sales driven by pandemic lockdowns would pull forward demand. The consensus view at the time suggested lockdowns had substantially expanded Peloton\u2019s total addressable market. <\/p>\n

Though shares surged north of $160 in December 2020 as the firm invested in efforts to meet such demand, Siegel was proved right in 2021\u00a0and 2022 as it became clear the firm had overestimated its growth prospects. The firm replaced founder John Foley as CEO with Barry McCarthy in February 2022. McCarthy, a former finance chief at
\n Spotify
\n and
\n Netflix,<\/span>
\n has turned to new rental initiatives, price changes, and steep cost cuts.\u00a0<\/p>\n

The stock closed up 3.6% at $8.09 on Monday.<\/p>\n

\u201cOur Underperform rating the past few years was predicated on a mismatch between narratives and numbers; storytelling lifted shares as TAM tales painted a future more exciting than customer counts ever supported,\u201d he wrote, referring to total addressable market. \u201cWe still fear TAM will prove materially lower than
management expectations and see risks (hence not Outperform), but also see green-shoots.\u201d<\/p>\n

Siegel notes the firm is once again beating revenue expectations. He added that inventory levels were down 56% year over year. And he said he calculated that the average monthly price per subscriber was up 2% quarter over quarter to roughly $36.09.<\/p>\n

\u201cOf note, this was the third quarter in PTON\u2019s public history where we calculated an Average Monthly Subscription price greater than $35,\u201d he wrote. \u201cCritically, with more subscribers paying the higher monthly cost, this is a trend that should improve further from here (with the caveat being the upcoming digital tiering relaunch). And frankly, we expect PTON could even consider further monthly price hikes down the road (weighing heightened profit vs. some added churn).\u201d<\/p>\n

Write to Connor Smith at connor.smith@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Peloton Interactive shares closed higher on Monday after the analyst who correctly predicted the firm\u2019s postpandemic growing pains finally raised his call on the stock from Underperform. BMO Capital Markets analyst Simeon Siegel raised his Peloton rating to Market Perform from Underperform and maintained a $9.50 price target in a Monday morning note. He pointed […]<\/p>\n","protected":false},"author":1,"featured_media":6599,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-6598","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nA Longtime Peloton Skeptic Just Upgraded the Stock | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Peloton Interactive shares closed higher on Monday after the analyst who correctly predicted the firm\u2019s postpandemic growing pains finally raised his call\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=6598\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta 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