Investors in Peloton Interactive Inc. faced another blow on Monday, as UBS cut its price target in half due to concerns over the company’s subscription outlook. The at-home fitness company has seen a downward trend in total interactive visits to its website, according to analyst Arpiné Kocharyan.
In her note to clients, Kocharyan highlighted a shift from a “positive trend” in May and June to a “negative” one in July. The latest data for August shows further weakness, prompting her to reduce the price target on the stock from $8 to $4. Kocharyan’s rating remains at sell, making her the most bearish among the 27 analysts surveyed by FactSet.
Peloton’s stock had a brief rebound earlier in the day, rising by as much as 2.9% before falling back down to a fresh record-low, closing with a 1.8% decline in afternoon trading.
Investors have been facing a tough road recently, with the stock losing ground in 12 out of the past 14 sessions, resulting in a 34% plunge during that period. This comes after a sharp drop of 34.3% in August, making it Peloton’s worst month since November 2021 and the second-worst month since its IPO in September 2019.
Peloton’s Stock Performance and Growth Expectations
According to recent reports, Peloton’s stock has experienced a significant decline of 24%, primarily due to the company’s underwhelming revenue outlook and the mounting costs associated with a bike recall. As a result, the company has faced numerous challenges in meeting the optimistic growth expectations set by Wall Street.
In analyzing the website’s performance, it is worth noting that while there has been an increase in website visits during the months of May and June, there has been a notable decrease in the amount of time spent on the site. This downward trend in visit duration is evident in the year-over-year comparison, with a 10% decline in July, an 8% decline in June, an 11% decline in May, and an additional 11% decline in August.
Peloton’s stock performance has been disappointing, with a year-to-date decline of 44.8%. Similarly, other fitness-industry players such as Nautilus Inc., with a 53% decline, and Planet Fitness Inc., with a 42.4% decline, have also struggled. In contrast, the S&P 500 has experienced a notable gain of 12.8% over the same period.
Overall, Peloton’s financial performance and growth projections have fallen short of expectations, resulting in a significant decline in their stock value. The company now faces the challenge of regaining investor confidence and reevaluating their strategies to ensure sustainable growth in the future.