7. Peloton Interactive, Inc. (NASDAQ:PTON)
Greenlight Capital’s Stake Value: $91.5 million
Number of Hedge Fund Holders: 49
Peloton Interactive, Inc. (NASDAQ:PTON) operates an integrated fitness platform in North America and internationally. Canaccord Genuity analysts upgraded the company’s stock from “Hold” to “Buy,” establishing a price objective of $10.00. The change in rating was backed by the analysts recognizing Peloton Interactive, Inc. (NASDAQ:PTON)’s position as a leading force in the connected fitness industry, thanks to a healthy membership base as well as a higher-margin recurring revenue stream. The firm’s analysts expect a positive revenue trajectory for the company moving forward, fueled by the revenue initiatives. This growth can be complemented through the expansion of subscription growth, with Peloton Interactive, Inc. (NASDAQ:PTON) planning to introduce adjacent products.
In Q2 2025, the company’s subscription revenue came in at $420.6 million. This revenue was higher than expected due to increased paid connected fitness subscriptions. Canaccord Genuity’s outlook for the company is backed by its strong and influential global brand and dedicated customer base. The analysts opine that Peloton Interactive, Inc. (NASDAQ:PTON) has substantial opportunities for value appreciation. The company expects total revenue for FY 2025 of $2.43 billion – $2.48 billion. This demonstrates Peloton Interactive, Inc. (NASDAQ:PTON)’s expectations for favorable subscription revenue from higher paid connected fitness subscriptions and favorable connected fitness products revenue from higher tread portfolio sales, partly offset by reduced bike portfolio sales.
Greenlight Capital, an investment management firm, released its Q4 2024 investor letter. Here is what the fund said:
“We had some good successes, as well. Peloton Interactive, Inc. (NASDAQ:PTON) and Tenet Healthcare (THC), discussed below, were also large winners during 2024.
We presented our PTON thesis at the Robin Hood Investors Conference in October and previously sent you copies of the presentation. Yes, David rode for 20 minutes while presenting the thesis.5 PTON was a popular stock during the COVID era as demand for at-home fitness products and services skyrocketed. During this time, the company invested heavily for growth without any regard for profitability or expense management. After multiple missteps and subsequent management changes, the stock fell 98% from its peak price in early 2021. Throughout this time, PTON has maintained a loyal and engaged customer base through its subscription-based business model.
Recently, the company has committed itself to dramatically cutting costs. Should PTON be successful in right-sizing its cost structure, we expect significant EBITDA generation, and when applying a peer multiple to those profits, we believe the stock has significant upside. We established our position at an average price of $4.07 per share. PTON ended the year at $8.70.”
