Peloton's 18.77% Surge on 393% Volume Spike (Rank 388) Sparks UBS 'Buy' Upgrade as Cost-Cutting and User Engagement Lift 2026 EBITDA Outlook

Peloton Interactive (PTON) surged 18.77% on July 30, 2025, with a trading volume of $320 million—a 393.19% increase from the prior day—ranking it 388th in market activity. The rally followed UBS’s upgrade of the stock to “Buy” from “Neutral,” citing cost-cutting initiatives and improved user engagement as catalysts for outperforming 2026 earnings expectations. UBS raised its price target to $11 from $7.50, projecting $400–450 million in EBITDA for fiscal 2026, exceeding current analyst forecasts of $358 million.

The upgrade highlighted Peloton’s strategic reductions in retail footprint, general expenses, and technology spending, which could add $80 million in operating savings beyond its $200 million target. Analysts noted stabilizing active user growth in May and June, alongside flat interactive visits in June—a marked improvement from an 11% decline in May. These trends, combined with planned subscription price hikes, are expected to generate $90–100 million in annualized revenue, offsetting potential churn and supporting EBITDA expansion.

Shares have gained 30% year-to-date but remain below pandemic-era highs. UBS emphasized the stock’s valuation at 6–7 times 2026 EBITDA as undemanding, given early signs of cash flow and profit recovery. Peloton’s second-quarter earnings on August 7 are seen as a critical test, with expectations of narrowing losses and potential upside if the company beats estimates. Analysts also anticipate subscriber declines slowing post new product launches and pricing adjustments.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day yielded a 166.71% return from 2022 to the present, significantly outperforming the benchmark return of 29.18%. The strategy's excess return was 137.53%, and it achieved a CAGR of 31.89%. This indicates a strong risk-adjusted performance and capital appreciation potential, driven by the liquidity and market sentiment around the selected stocks.