Peloton (PTON) Stock Forecast & Price Target

Peloton Interactive has demonstrated a positive financial trajectory, with subscription gross margins expanding significantly to 72.1%, supported by a fee increase and reduced music royalties, showcasing the efficacy of its pricing strategy. Additionally, the overall gross margin improved to 50.5%, exceeding industry guidance, and indicating robust operational efficiency. Member engagement metrics have remained strong, with a notable 46% of active members utilizing Peloton IQ, which has further contributed to increased average monthly workout time.

Peloton Interactive Inc. has experienced a notable decline in revenue, with connected fitness product sales decreasing by 4% year-over-year to $243.9 million and subscription revenues falling by 2% year-over-year to $412.6 million, despite previous expectations for positive growth in the second half of FY26. Additionally, the company has revised its full-year revenue guidance downwards to a range of $2.40 billion to $2.44 billion, reflecting a 3% decline at the midpoint, which coincides with a revenue miss in the second quarter. The firm's financial metrics indicate a fragile outlook, highlighted by ongoing challenges in subscriber retention and declining revenues across both segments, compounded by a recent transition in CFO leadership that raises concerns among investors.