Peloton Interactive (PTON) Forecasts $250 Million Free Cash Flow for FY2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
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Source: Fool
- Revenue Growth Outlook: Peloton forecasts a modest increase in fiscal Q2 2023 revenue, with a 180-basis-point rise in gross margin and adjusted EBITDA expected between $55 million and $75 million, indicating an 11% year-over-year growth at the midpoint, showcasing resilience amid challenges.
- Subscription User Decline: Despite revenue growth, Peloton anticipates a drop in paid connected fitness subscriptions to between 2.64 million and 2.67 million, reflecting an 8% year-over-year decline and marking the third consecutive quarter of user attrition, highlighting vulnerabilities in its business model.
- Cash Flow Guidance Increase: In its latest earnings report, Peloton raised its fiscal 2026 free cash flow guidance to $250 million, up $50 million from three months prior, signaling management's confidence in future cash flows and potentially providing investors with a safety margin.
- Product Refresh and Price Adjustments: The company recently launched two new bikes and two new treadmills as part of the Peloton Cross Training Series, while also announcing three app-related price hikes, indicating optimism about customer acceptance of its expanded training and wellness offerings.
Analyst Views on PTON
Wall Street analysts forecast PTON stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PTON is 9.85 USD with a low forecast of 6.50 USD and a high forecast of 14.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
6 Buy
7 Hold
0 Sell
Moderate Buy
Current: 6.700
Low
6.50
Averages
9.85
High
14.00
Current: 6.700
Low
6.50
Averages
9.85
High
14.00
About PTON
Peloton Interactive, Inc. is a global fitness company. The Company is a category innovator at the nexus of fitness, technology, and media, with a subscription platform that combines hardware, distinctive software, and exclusive content. Its segments include Connected Fitness Products and Subscription. The Company’s Connected Fitness Products portfolio includes the Peloton Bike, Bike+, Tread, Tread+, Guide, Row, and various Precor products. Access to the Peloton App is available with an All-Access or Guide Membership for Members who have Connected Fitness Products or through a standalone App Membership with multiple Membership tiers. Access to the Strength+ App is available with an All Access, Guide, or App+ Membership or through a standalone Strength+ subscription. The Company’s subscriptions provide access to Peloton content and its library of live and on-demand fitness classes. The Company’s subscriptions are offered on a month-to-month or prepaid basis.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
