'Build on our Leadership in Cardio': Peloton Stock (NASDAQ:PTON) Jumps With Sales Decline Projections

Business Insider

7 days ago

Normally, when a company projects a decline in sales, the stock price takes a beating. But exercise equipment maker Peloton (PTON) actually managed to buck this trend by announcing a loss in sales for the current quarter alongside planned job cuts. This combination apparently made investors very happy, and they sent Peloton shares screaming upward nearly 7% in Thursday morning's trading.
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Peloton projected revenue for the fiscal first quarter would come in between $525 million and $545 million. That was not only below estimates, a Bloomberg report noted, but was also '…a decline of 12% at the midpoint.' Meanwhile, full-year revenue for fiscal 2026 is projected between $2.4 billion and $2.5 billion. This matches analyst estimates, the report noted, but also meant a drop of around 2% against the same time the previous year.
Peloton has been almost eagerly pursuing a course of cost-cutting ever since its new CEO stepped in, and another wave of layoffs is expected to hit. Now, Peloton plans to lay off 6% of its global workforce, the report noted. Specifics were not cited, though, aside from a phrase that will likely serve as cold comfort for those cut off: the cuts were '…necessary for the long-term health…' of Peloton itself.
Pivot to Wellness
But no company on Earth can cut its way to profitability without making sure revenue comes in. To that end, Peloton is looking to make a bit of a pivot to 'wellness,' reports note. While it could be argued that Peloton was always about wellness—especially given its focus on exercise—there was room to do more.
To that end, Peloton will be focusing on 'health span,' or the length of time a person lives in good health. People are living longer, Peloton points out, but they are also living 'sicker.' Peloton plans to support improving 'health spans' with more personalized training programs, meditation and sleep features, and an app known as 'Strength Plus.'
What is the Prediction for Peloton Stock?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PTON stock based on five Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 137.25% rally in its share price over the past year, the average PTON price target of $8.47 per share implies 12.33% upside potential.