Overview

• US fitness equipment maker's Q3 revenue rose 1% yr/yr, beating analyst expectations

• Adjusted EBITDA rose 41% yr/yr to $126 mln

• Paid Connected Fitness subscriptions fell 7.6% yr/yr, in line with co's guidance

Outlook

• Peloton sees FY26 revenue between $2.42 bln and $2.44 bln, up from prior guidance

• Company expects FY26 gross margin of about 52.5%, down 50 bps from prior outlook

• Peloton expects FY26 free cash flow near $350 mln, up $75 mln from previous target

Result Drivers

• EQUIPMENT SALES - Co said Q3 revenue growth was mainly driven by outperformance in Connected Fitness equipment sales across Peloton and Precor brands

• PROMOTIONAL ACTIVITY - Gross margin improvement was held back by opportunistic promotional activity, which reduced margin relative to guidance

• OPERATING EXPENSE REDUCTION - Operating expenses fell 22% yr/yr, supporting improved profitability

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 9 "strong buy" or "buy", 11 "hold" and 1 "sell" or "strong sell"

• Wall Street's median 12-month price target for Peloton Interactive Inc is $7.00, about 34.6% above its May 6 closing price of $5.20

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 31 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.