Peloton Is Cutting Jobs. How Should You Play Beaten-Down PTON Stock Here?
Peloton (PTON) shares ended about flat on Thursday even though the connected fitness company reported a surprise profit for its Q4 and announced plans of lowering its headcount by another 6%.
According to the exercise equipment manufacturer, the latest round of layoffs will reduce run-rate expenses by another $50 million in its fiscal 2026, which started in July.
Peloton stock has been rather disappointing for investors this year. At the time of writing, it’s down more than 30% versus its year-to-date high of $10.25 set in the second week of February.
Cost Discipline Could Drive Peloton Stock Up Further
On Thursday, the connected fitness firm also confirmed plans of lowering another $50 million of run-rate expenses from indirect costs in its current financial quarter as well.
The announcement is largely positive for PTON shares because it signals the new management’s commitment to cost discipline.
Over time, these initiatives will result in improved operating leverage, enhanced profitability, and greater investor confidence in the company’s turnaround strategy.
Peloton stock may be worth owning at current levels also because the Nasdaq-listed firm reduced its net debt by a whopping 43% in its fiscal 2025.
How High Could PTON Shares Fly in 2025?
UBS analyst Arpine Kocharyan recommends owning Peloton shares for the longer term since its darkest days are finally over as evidenced by its stabilizing subscriber base.
Ahead of the earnings, Kocharyan upgraded the firm to “Buy” and raised her price target to $11, indicating potential upside of another 55% from current levels.
“We’re seeing better data trends for Peloton in terms of traffic and active users,” the UBS analyst told clients in her latest research note.
Additionally, Kocharyan believes the company’s focus on cutting costs could unlock significant further upside in PTON stock in the second half of 2025.
Peloton Remains in Favor With Wall Street Analysts
Investors could also take heart in the fact that UBS is far from alone in keeping bullish on PTON shares.
The consensus rating on Peloton Interactive currently sits at “Moderate Buy” with the mean target of about $10 indicating potential upside of more than 40% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.