What Happened?
Shares of exercise equipment company Peloton (NASDAQ:PTON) jumped 5.5% in the morning session after Macquarie upgraded the stock from Hold to Buy, citing the turnaround potential. The firm noted that management's continued optimism about near-term cash generation, as emphasized in the latest earnings release, strengthened the investment case at current valuation levels.
After the initial pop the shares cooled down to $6.84, up 3.3% from previous close.
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What The Market Is Telling Us
Peloton’s shares are extremely volatile and have had 67 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 5.4% on the news that the company reported weak first quarter 2025 results which included an EBITDA beat, but revenue was merely in line and full-year EBITDA guidance fell slightly short of expectations. Revenue declined 13% year over year, weighed down by a 27% drop in hardware sales, even as subscription revenue held steady and churn remained low. Overall, this was a softer quarter, as the market needed more convincing performance from this turnaround.
Peloton is down 22.5% since the beginning of the year, and at $6.84 per share, it is trading 35.3% below its 52-week high of $10.57 from December 2024. Investors who bought $1,000 worth of Peloton’s shares 5 years ago would now be looking at an investment worth $151.48.
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