Peloton's Worth A Ride, Baird Says In Bullish Initiation

Baird Equity Research started coverage of Peloton Interactive, Inc. PTON with a bullish rating, citing a large potential market and disruptive platform. 

The Analyst

Baird’s Jonathan Komp initiated coverage of Peloton with an Outperform rating and $28 price target.

The Thesis

Komp cited “very positive” customer satisfaction ratings for the newly public Peloton — with more than 60% of users saying they "love" the product — and said he sees substantial long-term sales and profit upside. (See his track record here.) 

The analyst acknowledged that Peloton’s late September IPO was disappointing; the stock is off more than 15% from its $29 IPO price.

As the company invests, it may prove difficult to achieve profitability in the first few years, Komp said. 

At the same time, Peloton has a large addressable market and could capture a $5-billion-plus revenue opportunity by fiscal 2024, he said. 

"PTON possesses substantial long-term sales/profit upside." 

Price Action

Peloton shares were trading 6.55% higher at $24.73 at the time of publication Wednesday. 

Related Links:

Peloton IPO: What You Need To Know

Peloton Files For IPO

Photo courtesy of Peloton.