Earnings Update: Here's Why Analysts Just Lifted Their Peloton Interactive, Inc. (NASDAQ:PTON) Price Target To US$9.96

It's been a good week for Peloton Interactive, Inc. (NASDAQ:PTON) shareholders, because the company has just released its latest quarterly results, and the shares gained 8.0% to US$8.37. Revenues of US$674m beat expectations by a respectable 3.2%, although statutory losses per share increased. Peloton Interactive lost US$0.24, which was 26% more than what the analysts had included in their models. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Peloton Interactive after the latest results.

Check out our latest analysis for Peloton Interactive

After the latest results, the consensus from Peloton Interactive's 19 analysts is for revenues of US$2.46b in 2025, which would reflect a noticeable 6.0% decline in revenue compared to the last year of performance. Losses are predicted to fall substantially, shrinking 47% to US$0.39. Before this latest report, the consensus had been expecting revenues of US$2.47b and US$0.39 per share in losses.

The consensus price target rose 7.2% to US$9.96, with the analysts increasing their valuations as the business executes in line with forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Peloton Interactive, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$5.00 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 12% annualised decline to the end of 2025. That is a notable change from historical growth of 3.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Peloton Interactive is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Peloton Interactive analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Peloton Interactive (1 is concerning!) that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.