Peloton Wows Wall Street With Unexpected Revenue Growth

Peloton Interactive (PTON) stock is trading notably higher in Thursday's session after the connected fitness company beat top- and bottom-line expectations for its fiscal fourth quarter.

In the three months ended June 30, Peloton's revenue increased 0.2% year-over-year to $644 million, marking its first annual revenue growth since the second quarter of its fiscal 2022. The company's net loss per share narrowed to 8 cents from 68 cents in the year-ago period.

"We ended the 2024 fiscal year with strong Q4 performance, meeting or exceeding our guidance on all key metrics and making continued progress on a number of our financial goals," Peloton said. "With a stable financial foundation now in place, we can focus on innovation in a more strategic way, enhancing our Member experience and driving sustainable, profitable growth over the long term."

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The company's results handily beat analysts' expectations. Wall Street was anticipating revenue of $631 million and a net loss of 17 cents, according to CNBC.

Here's what Peloton expects to accomplish in the first quarter and full year of fiscal 2025:

For the first quarter of PTON's fiscal 2025, analysts anticipate revenue of $609 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $45 million. While the company's revenue forecast is below the Street's expectations, its higher EBITDA outlook reflects a focus on long-term profitable growth.

For the full-year, analysts are calling for revenue of $2.7 billion.

Is Peloton stock a buy, sell or hold?

Peloton has put Wall Street through the wringer since its pandemic peak. This year alone, shares are down nearly 29% – including Thursday's post-earnings surge. Unsurprisingly, Wall Street is on the sidelines when it comes to the consumer discretionary stock. 

According to S&P Global Market Intelligence, the consensus analyst target price for PTON stock is $4.75, representing implied upside of more than 14% to current levels. Meanwhile, the consensus recommendation is a Hold. 

Financial services firm UBS Global Research is even more bearish on the stock, with a Sell rating and a $2.50 price target.

"We believe consistent momentum in positive growth in total interactive visits could signal traction in demand, but we are also mindful of seasonal promotional activity that could temporarily impact these metrics over shorter periods," wrote UBS analyst Arpine Kocharyan in an August 13 note. "We believe investors remain focused on 2025 connected fitness subscription growth, especially as it becomes evident that the tiered app membership approach and the relaunched app did not drive the conversion to connected fitness many were expecting."

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