Peloton Q2 Beats On Sales, But JP Morgan Says Long-Term Growth Hinges On Subscriber Comeback

JP Morgan analyst Doug Anmuth reiterated the Neutral rating on Peloton Interactive, Inc. PTON.

The company reported a second-quarter loss per share of 24 cents, missing the street view of an 18-cent loss. Quarterly sales of $673.90 million outpaced the analyst consensus estimate of $654.036 million.

Anmuth expressed optimism about Peloton’s second-quarter performance, noting profitability improvements, declining operating expenses, and a stronger balance sheet, but emphasized the need for a return to subscriber growth, which the company doesn’t expect in the second half of 2025.

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Peloton expects FY25 revenue between $2.43 billion and $2.48 billion, compared to the $2.47 billion estimate. The company mentioned that this reflects a narrower range and an increase of $5 million at the midpoint.

The analyst sees a positive market reaction to Peloton’s raised FY25 guidance for Adj. EBITDA and free cash flow, while seeking further insights on growth prospects under new CEO Peter Stern.

The analyst noted that Peloton faced inventory constraints for Tread+ due to higher demand, which caused delays in some deliveries to third quarter.

Digital subscriptions fell by around 4k quarter-over-quarter to approximately 579k, aligning with company’s guidance and market expectations, while Strength+ surpassed 220k monthly active users.

Anmuth noted that the company’s second-quarter gross margin reached 47.2%, exceeding both the company’s guidance and market expectations.

Price Action: PTON shares are trading higher by 8.88% to $8.253 at last check Thursday.

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