Zacks Research Upgrades Peloton Interactive to Strong-Buy

Peloton Interactive (NASDAQ: PTON) has received a significant upgrade from Zacks Research, moving from a “hold” rating to a “strong-buy” rating, according to a report issued on November 6, 2023. This positive shift comes amid various assessments from other research firms, indicating a growing interest in the company’s stock.

Research from Weiss Ratings recently maintained a “sell (d-)” rating for Peloton, while Telsey Advisory Group reiterated a “market perform” rating with a price target of $9.00. Citigroup lowered its price target from $9.50 to $8.25, assigning a “neutral” rating. In contrast, Macquarie increased their target from $11.00 to $12.00, suggesting an “outperform” rating. Morgan Stanley also raised its target price from $6.00 to $6.50, maintaining an “equal weight” rating.

As it stands, the consensus among analysts shows one strong buy, eight buy ratings, seven holds, and one sell rating for Peloton. The average rating is categorized as a “moderate buy” with an average price target of $9.86, according to data compiled by MarketBeat.

Quarterly Performance and Earnings

Peloton’s financial performance for the last quarter revealed earnings of $0.03 per share, surpassing the consensus estimate of $0.01 by $0.02. Revenue for the quarter reached $550.80 million, exceeding expectations of $540.61 million. However, this figure represents a 6.0% decline compared to the same quarter last year. Analysts forecast that Peloton will report an earnings per share (EPS) of -0.36 for the current fiscal year.

Insider Activity and Institutional Investment

In recent insider trading activity, Chief Accounting Officer Saqib Baig sold 42,267 shares of Peloton on November 17, 2023, at an average price of $7.25, amounting to a total of $306,435.75. Following this transaction, Baig holds 193,052 shares, valued at approximately $1,399,627, reflecting a 17.96% decrease in his position.

Another notable sale involved insider Jennifer Cunningham Cotter, who disposed of 148,432 shares at an average price of $7.22, totaling $1,071,679.04. After the sale, Cotter owns 231,764 shares worth $1,673,336.08, marking a 39.04% reduction in her stake. Over the past three months, insiders have sold a total of 1,107,129 shares valued at $7,708,694, with corporate insiders currently holding 1.30% of the stock.

Institutional investors have also been active, with Vanguard Group Inc. increasing its position in Peloton by 2.1% during the third quarter, now owning 38,636,291 shares valued at $347,727,000. Other significant moves include Eminence Capital LP, which acquired a new stake valued at approximately $112,681,000, and Goldman Sachs Group Inc., which raised its holdings by 27.1%, now owning 7,056,642 shares worth $44,598,000. Overall, institutional investors and hedge funds own 77.01% of Peloton’s stock.

Founded in 2012 by John Foley, Peloton Interactive combines digital fitness solutions with connected exercise equipment. The company offers a range of products, including stationary bikes, treadmills, and rowing machines, all integrated with a platform that streams live and on-demand fitness classes.