Peloton Surges Amid Unexpected Profit: Revenue Down, Cost-Cutting Boosts Net Income

Peloton Interactive reported a quarterly profit, exceeding analyst projections, despite a 6% revenue dip. The company achieved net income of $21.6 million, leading to a premarket share price surge exceeding 10%. Wall Street forecasts suggest mixed outcomes, with an average target price of $8.95 and a potential upside of 26.63%. However, the GF Value estimates a potential downside of 27.16% from the current stock price.

Peloton Interactive (PTON) reported a quarterly profit of $21.6 million, surpassing Wall Street expectations and leading to a premarket share price surge of over 10%. The company's net income for the fourth fiscal quarter ended June 30, 2025, was significantly higher than the $30.5 million loss reported in the same period last year [1].

Despite a 6% drop in revenue to $607 million, Peloton beat analyst expectations, with earnings per share coming in at 5 cents compared to the expected loss of 6 cents [1]. The company's revenue was $580 million, slightly below the $579.91 million forecast by analysts [2].

Peloton's CEO, Peter Stern, outlined a cost-cutting plan in a letter to shareholders, aiming to save $100 million in expenses by the end of fiscal 2026. This includes laying off 6% of its staff, which follows a 15% reduction in staff announced last year. The company aims to reduce run-rate expenses by another $100 million in fiscal 2026, with half of the cuts coming from indirect costs and the other half from staff reductions [1].

The company is also planning to expand its physical retail presence by opening micro-stores and increasing the presence of its instructors at in-person events. Additionally, Peloton will work more closely with Precor, the fitness company it acquired, and begin planning for international expansion [1].

Wall Street analysts have provided mixed ratings and price targets for PTON. Telsey Advisory Group maintains a Market Perform rating with a price target of $8, while Goldman Sachs has a Neutral rating and cut its price target from $10 to $7 [2].

Peloton's stock price has been volatile, with a 20% decline in the first half of 2025. However, the company's latest earnings report suggests that its cost-cutting measures and strategic plans may be starting to bear fruit, with a potential for future growth.

References:
[1] https://www.cnbc.com/2025/08/07/peloton-pton-earnings-q4-2025.html
[2] https://www.ainvest.com/news/peloton-interactive-q4-earnings-analysts-revamp-expectations-thursday-release-2508/