Peloton Interactive Inc. (NASDAQ:PTON) had trouble adjusting to a post-pandemic environment, but now it seems that things are starting to improve.
The shares of connected fitness have doubled in the last two months, as its financials are improving.
After such an upswing, one might wonder whether there’s still any upside in the Peloton share price. We’ll find out.
Peloton stock could benefit from a return to growth in sales
Peloton’s sales have already returned to a growth path.
The exercise equipment manufacturer reported in August a growth of 0.2% on a year-on-year basis for the fourth quarter. It was a small but significant increase.
PTON announced that it would cut marketing expenses by 19%.
The Nasdaq listed company has also reduced its headcount globally by 15%, and is continuing to reduce its retail showroom space in order to lower its run-rate annual expenses by more than $200 million before the end fiscal year 2025.
Peloton has clearly found a religion when it comes to cost structure. Moving further down this path could allow the company to command higher prices in future.
BMO’s analysts still rate Peloton at “market Perform”.
The $6.50 target price indicates that there is potential for a 15% increase from this point.
PTON, however, isn’t a good choice for investors looking to earn income as the stock does not pay dividends at this time.
Peloton Interactive’s commitment to profit is unwavering
Peloton Interactive investors should be feeling better as the management is now putting a stop to chasing growth no matter what. They have committed to restoring profitability before anything else.
PTON has also recently seen a number of developments, including the introduction of an equipment rental service in Britain and the refinancing the company’s balance sheet.
Peloton remains cheap despite its recent rise.
This New York-based firm, despite its turnaround, still poses a high level of risk for your investment portfolio.
It is moving now in the correct direction, and could offer profitable long-term gains under the proper management.
If you have the right risk appetite, building a small investment in Peloton at its current price may be the best decision.
The post Peloton stocks more than doubled in two months: Is the growth sustainable This post may be updated as new information unfolds
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