Peloton’s earnings to draw focus on CEO search, efforts to grow subscribers

Peloton Interactive’s investors will look for updates on its CEO appointment and efforts to grow subscribers in fiscal 2025 when the fitness equipment maker reports results on Thursday.
The fitness equipment maker has struggled to bounce back from a sales slump after a pandemic-led boom and has aggressively implemented a turnaround plan, including job cuts, to revive growth and break its loss-making streak.
Some analysts expect a softer subscriber growth for fiscal 2025 as the company, which offers exclusive workout content subscriptions that can be synchronized with Peloton’s equipment, remains focused on cutting costs.
Macquarie analyst Paul Golding said Peloton is a business that acquires its highest lifetime value members by offering a combination of hardware and software.
“The cost of the hardware and the ability to sell the hardware continues to be a factor in growing subscribers,” Golding said.
Peloton has yet to name a new CEO after Barry McCarthy stepped down in May from the top job following the company’s weak results.
Under McCarthy, Peloton attempted to rebrand itself as an overall fitness content company, centering on its app to attract members who may not be able to afford its pricey bikes and treadmills.
A lack of growth could prompt Peloton’s management to take another hard look at its cost structure as they do not see any signs of a demand uptick, analysts said.
CONTEXT
Following McCarthy’s departure, analysts are now looking for clarity on Peloton’s strategy to recover sales and retain subscribers while ensuring cost discipline.
Meanwhile, the New York-based company is refinancing its debt to avoid a liquidity crunch, giving the company more time to execute its turnaround plan.
FUNDAMENTALS
** Peloton is expected to report a 1.8 per cent decrease in revenue to $630.5 million from $642.1 million a year ago, according to the mean estimate from 17 analysts, based on LSEG data.
** ​LSEG’s mean analyst estimate for Peloton Interactive Inc is for a loss of 17 cents per share.
WALL STREET SENTIMENT
** Wall Street’s median 12-month price target for Peloton Interactive Inc is $3.80​, above​ its last closing price of $3.23. ​​​
** Peloton shares have lost about 45 per cent in 2024.
(This story has been refiled to fix the spelling of brokerage name to Macquarie, in paragraph 4)