Peloton Shares Surge 17% as Analyst Predicts Price Hikes

Peloton Interactive shares rose 17% as UBS upgraded the stock to Buy and raised its price target to $11. The analyst cited potential revenue growth driven by price increases and improving user trends.

Peloton Interactive (NASDAQ: PTON) shares rose by 17% on July 1, 2025, following an upgrade to a "buy" rating by UBS Group. The upgrade, which was announced on Wednesday, July 30, 2025, was accompanied by a price target of $11.00, suggesting a potential upside of 77.99% from the stock's current price [1].

The upgrade comes amidst a mixed landscape of analyst opinions. While UBS Group has raised its price target, other analysts have lowered their targets. Bank of America, for instance, reduced its price target from $11.50 to $9.50, while Goldman Sachs and JPMorgan both set neutral ratings with targets of $7.00 [1].

Peloton's recent earnings report showed a loss of ($0.12) per share, missing estimates by $0.06, and a 13.1% decline in revenue year-over-year [1]. Despite these results, UBS Group's analyst Arpine Kocharian cited potential revenue growth driven by price increases and improving user trends as reasons for the upgrade. Kocharian is modeling $90 million to $100 million in annualized revenue from subscription pricing increases and EBITDA (earnings before interest, taxes, depreciation, and amortization) to come in between $400 million and $450 million in fiscal year 2026 [2].

The upgrade is a sign of optimism about Peloton's future prospects, with UBS Group's Kocharian noting that while the company's fundamentals are not yet robust, the risk-reward proposition has improved. The stock's valuation at a roughly $2.5 billion market cap, trading at less than 7 times Kocharian's EBITDA forecast, presents an attractive opportunity for investors [2].

Investors should, however, remain cautious. Peloton's recent earnings report and the mixed opinions of other analysts suggest that the road to profitability is still uncertain. As with any investment, a thorough analysis of the company's fundamentals and the broader market conditions is essential before making a decision.

References:
[1] https://www.marketbeat.com/instant-alerts/peloton-interactive-nasdaqpton-upgraded-by-ubs-group-to-buy-rating-2025-07-30/
[2] https://www.nasdaq.com/articles/why-shares-peloton-are-surging-week