Peloton Faces Subscriber Setbacks, Tariff Troubles Despite Profit Push

Peloton Interactive Inc‘s (NASDAQ:PTON) turnaround shows operational progress. Still, continued pressure on hardware demand and subscriber declines have prompted lingering uncertainty among analysts about the company's growth path.

What Happened: Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on Peloton’s shares on Monday and lowered the price forecast from $11.00 to $9.00.

Telsey anticipates Peloton's third-quarter fiscal 2025 results to demonstrate ongoing gains in profitability and effective operational management. New CEO Peter Stern is leading initiatives to tighten spending, enhance hardware margins, and boost marketing efficiency, she adds.

Investors will also watch for further evidence of strategic progress as the company aims to steady its subscriber base. Updates on innovation efforts, expansion through new channels (like Costco, international markets, and commercial partnerships), and retention strategies are of particular interest.

That said, demand for hardware will stay under pressure due to seasonal slowdowns and consumer caution, Telsey predicts. To drive sales, Peloton has launched several promotions during this period and into early fourth-quarter.

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Why It Matters: Looking ahead, tariff-related issues will be an important factor. After all, there’s a 10% tariff on products from Taiwan, where all of Peloton's connected fitness equipment is manufactured.

The company's exposure to China remains minimal. The revised price forecast stems from heightened market instability and broader economic headwinds.

The analyst expects Peloton quarterly sales to fall 13.1% to $624 million. That’s in line with the FactSet consensus and within the company’s guidance range.

Hardware revenue will drop 25%, while subscriber revenue will decline 6%. Connected fitness subscribers are estimated to decrease 6.3% year over year and 1% sequentially, reaching 2.86 million, matching guidance and slightly above consensus.

For fiscal 2025, analysts expects Peloton's revenue to decline 8.2% to $2.48 billion, aligning with company guidance and slightly above consensus. Connected fitness subscribers are projected to fall 7% year over year to 2.78 million, consistent with expectations.

What’s Next: In fiscal 2026, revenue is expected to edge up 0.9% to $2.5 billion. Subscriber numbers may dip 1% to 2.75 million.

Price Action: PTON shares traded lower by 0.44% at $6.79 at last check Monday.

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