Peloton Interactive, Inc. PTON shares sank further into negative terrain on Tuesday after it reported disappointing first-quarter results and issued weak guidance.
Further Downside Limited: TFI Securities analyst Ming-Chi Kuo is optimistic that a turnaround could be in the cards.
The analyst noted that Peloton shares have declined nearly 50% since April 7, when he tweeted that the company cut all component orders for 2022. A further downside could be limited, the analyst said.
Kuo also provided cues for investors to identify the bottom in the stock.
"The best way to check if $PTON's worst is over is to keep an eye on when it starts replacing orders," the analyst said.
Related Link: Peloton Scouting For Minority Investment To Get Its Business On Track: Report
Chase The Few Fitness Freaks: Peloton needs to make as much money as possible from the few people who are passionate about fitness, Gene Munster of Loup Funds said. It should target this group with both hardware and software, he added.
"To those members: Peloton is a drug, and they're willing to pay a lot for it," Munster said.
The analyst also said the new CEO Barry McCarthy is the right person to turn the company around.
"I was impressed with his pragmatic conference call and conservative outlook," the analyst said.
He believes that this formula will win over investors in the long run.
Peloton shares, which slumped 8.70% to $12.90 on Tuesday, reversed course and traded 5.43% higher at $13.60 in the after-hours session, according to BenzingaPro data.
Related Link: Does A Potential Peloton Acquisition Make Strategic Sense For Apple?
Photo courtesy: Peloton
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