Peloton Stock Forecast 2025
The COVID-19 pandemic shuttered countless retail gyms last year, several of which went into bankruptcy and won’t be reopening their doors. That was a boon for connected fitness leader Peloton (NASDAQ: PTON), which benefited from the surge in demand for home exercise offerings as people still needed to maintain their health during the crisis.
Peloton shares skyrocketed by 434% in 2020 as the company put up incredible growth figures across the business. To be clear, Peloton was already enjoying triple-digit growth before the outbreak, but the pandemic supercharged sales.
Investors expect growth to continue for the foreseeable future, with shares trading at 10.9 times sales. Following a pullback in growth stocks earlier this year, the stock now trades around $126. Wall Street analyst price targets range from a high of $185 to a low of $45, with an average valuation estimate of $130.32.
Peloton Stock Forecast 2021
Peloton’s fiscal year ends at the end of June, so the company just concluded its fiscal 2021 but has not yet reported financial results. All estimates presented below are for fiscal years.
As of the end of the fiscal third quarter, Peloton had 2.08 million Connected Fitness subscriptions, 891,000 Digital Subscriptions, and 5.4 million total members. Engagement remains incredibly robust, with average monthly workouts per Connected Fitness subscription reaching a record 26 during the quarter.
Guidance for the fiscal fourth quarter calls for revenue of $915 million after taking a $165 million hit related to the recent recall of Peloton’s Tread and Tread+ products due to safety issues. Total Connected Fitness subscriptions at the end of the fiscal year should be approximately 2.28 million, in line with the previously issued outlook.
Peloton typically offers full-year guidance as it kicks off a new fiscal year, so investors should expect to receive a forecast for fiscal 2022 soon.
Peloton Stock Forecast 2025
Analysts are modeling for a healthy growth runway in the years ahead for Peloton, with sales of nearly $10 billion in fiscal 2025. That would translate into a compound annual growth rate (CAGR) of 19% if Peloton can continue executing and growing its subscriber base.
Here’s the path that Wall Street sees Peloton taking to get there.
Detailed forecasts around adjusted earnings per share (EPS) are not immediately available.
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Peloton Stock Forecast 2030
Farther out, revenue could more than double yet again over the following five years. Long-term forecasts are inherently more uncertain in the tech industry, but analysts still need to estimate future cash flows for valuation purposes.
Sales could approach $22 billion by fiscal 2030.
Peloton Bull Case
Despite the negative impacts on Peloton’s brand associated with the recall, the company has been executing remarkably well and has established itself as a leader in connected fitness.
Peloton is already working to redesign its treadmill products to address safety issues, collaborating with the Consumer Product Safety Commission (CPSC) in the process.
Peloton is also pursuing many other promising growth opportunities, such as expanding beyond the cardio category. There have long been rumors that Peloton has a rowing machine in the pipeline, with CEO John Foley recently teasing that the company wants to enter the strength category.
Foley had also previously set an ambitious goal of reaching 100 million subscribers in the long-term, which Peloton hopes to accomplish by reducing prices over time, continuing product innovation, and expanding internationally (the company just recently launched in Australia), among other growth levers.
Peloton also recently closed its $420 million acquisition of Precor, one of the largest manufacturers of commercial gym equipment in the United States.
That deal not only gives Peloton an inroad into the massive commercial market—apartment buildings, corporate campuses, hotels, etc.—but also secures a large domestic manufacturing footprint that will help the company ease supply constraints that have limited Peloton’s ability to meet booming demand.
In a few years, it’s not hard to imagine Peloton offering a seamless user experience where members exercise at home and then log into their Peloton account at work, at a retail gym, or while traveling to track their activity.
Peloton Bear Case
In disrupting the connected fitness market, Peloton’s success has already attracted the attention of competitors. In addition to longstanding rivals like Nautilus (NYSE: NLS), which also operates the Bowflex brand, larger technology giants have been exploring health and fitness offerings.
Perhaps most notably, Apple (NASDAQ: AAPL) launched Fitness+ last year as part of its broader strategy to grow its services business. Fitness+ competes directly with Peloton’s Digital Membership, which primarily consists of floor exercises and does not require specialized equipment.
Peloton’s Digital Membership is an important channel for Connected Fitness subscriber additions, as many of those users end up purchasing Peloton hardware and upgrading to the more expensive subscription after experiencing the platform. To the extent that competing services like Apple Fitness+ succeed, that could put a dent in Peloton’s user growth.
Additionally, if Peloton makes more missteps regarding consumer safety, its brand could be tarnished again. Hopefully, the company has learned its lesson and will be more conscientious about safety and product design going forward as it expands its product portfolio.