Peloton Interactive (NASDAQ:PTON) gained more than 4% intra-day today after Truist Securities upgraded the stock to Buy from Hold, setting a new price target of $11.00, as analysts see the fitness company nearing a critical turning point after years of struggles.
The firm highlighted that more than three years after its initial downgrade, Peloton’s fundamentals have notably improved. With the balance sheet strengthened and operating expenses significantly reduced, the company is positioned to maintain consistent free cash flow profitability. New leadership is also shifting focus back to revenue growth, which Truist expects to pick up meaningfully in fiscal 2026.
A key part of the bullish case is Peloton’s business mix: subscriptions now contribute roughly two-thirds of total revenue, helping to stabilize margins and improve overall profitability. Valuation metrics, currently at 1.4 times sales and 10.3 times adjusted EBITDA, are seen as “washed out,” suggesting the stock is largely de-risked at current levels.
Looking to near-term catalysts, Truist believes Peloton’s fiscal third-quarter results, scheduled for May 8, could show revenue tracking slightly above consensus based on internal card data.
The upgrade reflects growing confidence that Peloton is entering a more sustainable phase of recovery after a prolonged period of restructuring and market skepticism.