Peloton Interactive’s upcoming earnings report will draw attention to the company’s ongoing CEO search and its strategies to boost subscriber growth for fiscal 2025. Scheduled for release on Thursday, the report will provide insights into how the fitness equipment maker plans to navigate its recovery from a post-pandemic sales slump.
Peloton has faced significant challenges since the surge in demand during the pandemic, leading to aggressive cost-cutting measures, including job reductions, as part of its turnaround strategy. Analysts anticipate that subscriber growth may be slower than hoped, given the company’s focus on reducing expenses amid a competitive market.
Macquarie analyst Paul Golding noted that Peloton’s ability to attract high-value members is tied to its combination of hardware and software offerings. “The cost of the hardware and the ability to sell the hardware continues to be a factor in growing subscribers,” Golding said.
The company has yet to appoint a new CEO following Barry McCarthy’s departure in May, which occurred after disappointing results. Under McCarthy’s leadership, Peloton rebranded itself as a comprehensive fitness content provider, emphasizing its app to reach members who might not invest in its high-priced equipment.
With no immediate signs of increased demand, analysts are urging Peloton to reassess its cost structure and strategic approach. In the meantime, the company is working on refinancing its debt to avoid a liquidity crisis and gain more time to implement its turnaround plan.
Peloton is expected to report a slight revenue decline of 1.8%, projecting earnings of $630.5 million compared to $642.1 million the previous year. Analysts forecast a loss of 17 cents per share. The median 12-month price target for Peloton stock stands at $3.80, above its recent closing price of $3.23.
