UBS analyst Arpine Kocharyan has expressed a pessimistic outlook on the future growth prospects of Peloton Interactive stock. In line with this sentiment, she has halved her price target on Peloton stock (ticker: PTON) to $4 from $8, maintaining her Sell rating. This revised price target suggests a potential 10% decrease from the stock’s closing price of $4.46 on Friday.
While Kocharyan’s 2024 total revenue estimate has been adjusted to $2.86 billion from $2.98 billion, it still surpasses the Wall Street consensus estimate of $2.79 billion, as reported by FactSet. Additionally, the analyst has lowered her projections for earnings before interest, taxes, depreciation, and amortization through fiscal 2026.
The primary reason behind Kocharyan’s bearish stance is the heightened uncertainty surrounding Peloton’s subscription growth outlook. She emphasized that this uncertainty directly impacts her view on the stock’s performance.
Previously, Kocharyan had observed a positive trend in the total interactive visits to the Peloton website during May and June. However, she noted a shift towards negativity in July, with August indicating further weakness.
Despite the challenges, Peloton Interactive stock must navigate, retaining key details, such as revenue estimates and growth concerns, it may face potential declines ahead.
Despite these challenges, experts remain skeptical about Peloton’s growth prospects. Analyst Kocharyan expressed doubt that Peloton would meet the optimistic projections for connected fitness subscriptions.
As a result of these concerns, Peloton’s stock is currently experiencing a decline. On Monday, it fell by 2.1% to $4.36, reaching a record low. If the stock continues to close at new lows, it will mark its eighth consecutive record closing day this month—a significant setback for the company. Year-to-date, Peloton’s stock has already plummeted by 45%.