(WSN) – Investors in Peloton Interactive will be looking for updates on the appointment of a new CEO and the company’s strategies for growing its subscriber base in fiscal 2025 when the fitness equipment maker releases its financial results on Thursday.
The company has struggled to recover from a sales decline following the pandemic-induced surge and has implemented an aggressive turnaround plan, including job cuts, to stimulate growth and end its streak of losses.
Analysts predict slower subscriber growth for fiscal 2025 as Peloton, which provides exclusive workout content subscriptions compatible with its equipment, remains focused on cost-cutting.
Macquarie analyst Paul Golding noted that Peloton’s business model involves acquiring high-value members through a combination of hardware and software.
“The cost of the hardware and its sale continue to influence subscriber growth,” Golding said.
Peloton has yet to appoint a new CEO following Barry McCarthy’s resignation in May, which came after the company reported weak results.
Under McCarthy, Peloton sought to reposition itself as a comprehensive fitness content provider, emphasizing its app to attract members who might not afford its expensive bikes and treadmills.
A lack of growth might prompt Peloton’s management to reassess its cost structure if demand does not show signs of improvement, analysts indicated.
Context
With McCarthy’s departure, analysts are eager to see how Peloton plans to recover sales and retain subscribers while managing costs.
Additionally, the New York-based company is refinancing its debt to avoid a liquidity crisis, giving it more time to implement its turnaround strategy.
Fundamentals
Peloton is projected to report a 1.8% decline in revenue to $630.5 million from $642.1 million last year, according to the average estimate of 17 analysts, based on LSEG data.
LSEG’s average analyst estimate for Peloton Interactive Inc is a loss of 17 cents per share.
Wall Street Sentiment
Wall Street’s median 12-month price target for Peloton Interactive Inc is $3.80, above its last closing price of $3.23.
Peloton shares have fallen by approximately 45% in 2024.
