Post its earnings report, PTON shares climbed as much as 13.5% before ending marginally up in Thursday’s regular session.
Peloton (PTON) shares rose nearly 4% in extended trading Thursday, after Goldman Sachs upgraded the stock, citing its fourth-quarter performance and recently announced growth initiatives.
PTON stock climbed as much as 13.5% before ending marginally higher in the regular session, following the premarket results announcement.
Goldman Sachs upgraded the stock to ‘Buy’ from ‘Neutral’ and raised its price target to $11.50 from $7, implying more than 60% upside from the previous close. This follows a similar rating upgrade from UBS last week.
On Thursday, the workout bike and subscription company reported a 6% decline in revenue for the second quarter, which was better than expected, with gross profit improving and operating expenses decreasing by 20%.
Its annual forecast range of $2.4 billion to $2.5 billion was in line with expectations, according to Bloomberg.
Peloton is laying off 6% of its global workforce, and CEO Peter Stern vowed to expand efforts to pivot the company from hardware sales to personalized coaching software and services.
“In our next chapter, we will build upon our leadership in cardio to support our members’ entire wellness journey, accelerating our progress in strength and mobility and exploring new frontiers in mental well-being, sleep and recovery, nutrition and hydration,” Stern told Bloomberg.
Goldman Sachs analysts lauded Peloton’s efforts to diversify its offering and roll out more tech-enabled personalization.
Peloton also discussed how subscriber growth would likely be less important going forward than the dual goal of expanding the ecosystem of experiences and use cases while also examining paths to increased monetization, the research firm said.
On Stocktwits, retail sentiment for PTON was ‘bullish’ as of the last reading, unchanged from before the results announcement.
A user lauded the company’s progress under Stern, adding that Peloton stock could climb to $40 soon or “the company gets bought out shortly” if the current trajectory continues.
Several other observers reignited speculation that Apple could acquire Peloton, a rumor that has circulated for years.
Peloton, known for its connected fitness equipment and subscription-based platform, has seen its business decline since 2021, after a surge in demand during the COVID-19 lockdowns when consumers turned to at-home workouts.
Peloton’s sales have shrunk in each of the last three years, and its stock is down about 96% from its high in January 2021.
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