Peloton Interactive Inc. (NASDAQ:PTON) is scheduled to report its fourth-quarter and full-year fiscal 2025 earnings on Thursday, Aug. 7, before the market opens.
Telsey Advisory Group analyst Dana Telsey reiterated the Market Perform rating on Peloton Interactive, with a price forecast of $8.
Telsey points out that Peloton faces a 25% tariff on aluminum used in both Peloton- and Precor-branded equipment, along with additional duties on certain Precor and apparel imports from China.
Although the company describes the trade landscape as evolving, it has estimated a near-term impact of approximately $5 million in free cash flow pressure for the fourth quarter of fiscal 2025.
Telsey expects Peloton's fourth-quarter results to show continued progress in cost control and profitability efforts, but remains cautious due to ongoing sales pressure and lack of a clear growth path.
Telsey emphasizes the need for clearer signs of stabilizing subscriber numbers and hardware demand, while noting strategic steps taken such as leadership changes under CEO Peter Stern, promotional activity during Amazon Prime Day, possible adjustments to the $44 all-access membership fee and the launch of the Peloton Repowered marketplace.
Despite efforts in innovation, customer expansion and retention, the analyst remains on the sidelines, citing consumer pullback on big-ticket purchases.
Telsey maintains a Market Perform rating based on a ~1.5x EV/Sales multiple applied to the FY26 sales forecast of $2.47 billion.
The analyst forecasts Peloton's quarterly sales to decline 9% year-over-year to $586 million, aligning with the high end of company guidance but slightly above the FactSet consensus of $581 million.
The breakdown includes an estimated 17% drop in hardware sales and a 5% decrease in subscription revenue.
Telsey models connected fitness subscribers falling 5.8% year-over-year and 3% sequentially to 2.81 million.
Adjusted EBITDA is expected to land at $85 million, near the top of the company's implied range of $66 million to $86 million, while gross margin is projected at 51.4%, modestly trailing the 52.3% consensus.
PTON Price Action: Peloton shares are trading lower by 7.91% to $6.58 at publication on Friday.
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Photo: Courtesy Peloton
