Peloton To See Subdued Demand In Q2, Says Analyst

Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of Peloton Interactive Inc PTON with a price target of $9.00.
The analyst expects 2QF23 to show a small gain in connected fitness subscribers to 3 million versus the September quarter of 2.97 million.
The analyst sees a sales decline of 38% YoY as demand for connected fitness equipment remains subdued despite higher promotions in the sector during the holiday/new year's resolution period.
The analyst models an EBITDA loss of ($95 million), better than the guidance of ($115 million) - ($100 million) given ongoing cost reductions.
The analyst will also focus on the 3QF23 outlook, trends in new wholesale accounts, Amazon and Dick's, during the quarter, reception to the Peloton Row, which launched September, details on the Peloton certified refurbished (PCR) program for Bike and Bike+ launched on December 26 in the US and Canada and plans for a tiered digital app strategy in 2023.
Also Read: Peloton Launches Refurbished Bikes Program With Savings Of $300-$500
Peloton is making progress in reducing costs, its cash burn, and its inventory position, the analyst added.
However, demand remains a problem, with few new subscribers expected this quarter and in calendar 1H23.
The company is working on strategic initiatives to drive growth, although they remain small and appear less profitable than DTC, limiting visibility into Peloton's profits in the medium-term, added the analyst.
As far as the stock, we believe the company needs to stabilize sales, in addition to the progress on cost reduction and cash optimization, to gain more support, the analyst remarked.
Price Action: PTON shares are trading lower by 0.91% at $12.54 on the last check Monday.
Also Read: Peloton Settles Treadmill Recall Incident And Violation With $19.1M Penalty

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