Peloton Raises 2025 Revenue Forecast on Subscription Growth

Peloton Interactive reported a strong third-quarter revenue of $624 million, surpassing market expectations despite a 13% year-over-year decline and a slight drop in member count to 6.1 million. Under new CEO Peter Stern, the company is shifting focus from hardware sales to subscription-based software services, expecting 2025 revenue between $2.46 billion and $2.47 billion, driven by increased demand for live and on-demand fitness content. Peloton's strategy includes expanding its B2B offerings to corporate wellness clients, aiming to capitalize on growing employer investments in employee health. The company achieved its fifth consecutive quarter of positive adjusted EBITDA and free cash flow, along with reduced debt, enhancing financial stability. Analysts maintain a consensus 'Hold' rating with an average price target around $8.98, indicating upside potential, while GuruFocus warns of possible downside, estimating a fair value below current prices. Overall, Peloton's pivot towards subscription services under Stern's leadership is seen as a strategic growth move to stabilize revenue amid declining equipment sales.