Peloton Stock Is Rallying, But Can It Deliver Another 70% Upside?

Peloton Interactive Inc. (NASDAQ: PTON) got clobbered post-COVID and has remained in a rut ever since. Recently, however, the fitness tech company has begun to rally. While challenges still weigh on the stock, if analyst estimates hold, investors could see significant upside over the next year.

PTON made its public debut in 2019, not knowing it would soon be in for a major windfall when COVID hit in 2020, and people suddenly found themselves confined to their homes. With new time on their hands or craving a replacement for their regular gym visits, people shelled out for the company’s equipment, which offered a way to interact with the outside world while working out.

The demand caused the stock to skyrocket. After debuting at $29 per share, it soared above $170 by January 2021. But the honeymoon didn’t last. By the end of that year, as pandemic tailwinds faded, the stock fell back into the $30s and continued to slide over the next few years, at one point falling below $3.

Since April 2021, shares have fallen more than 95%. Peloton is not alone, however. Other pandemic-era winners like Roku Inc. (NASDAQ: ROKU) and Teladoc Health Inc. (NYSE: TDOC), which benefited as people spent more time at home, also saw their shares tank as demand normalized.

Stock Rally Sparks Renewed Investor Interest

Recently, Peloton shares have regained some momentum. While the stock is nowhere near its pandemic-level highs and even remains well below its 52-week high of roughly $9 reached in the fall, it has rallied recently, up 30% over the past month.

And based on analyst estimates, the shares may have further to run.

The 12-month consensus price target on PTON is $8.60, based on 14 analyst ratings, implying huge upside from current levels. Three analysts see shares climbing above $10. Notably, none of the price targets issued over the past year project the stock falling below $5.

The majority of analysts rate the stock a Hold, with eight in that camp. Five analysts rate the stock a Buy, while one rates it a Sell. Sentiment weakened following the company’s Q2 2026 earnings report, released Feb. 5, which prompted a slew of negative analyst actions, including two downgrades and four price target cuts.

Revenue Miss and Subscriber Declines Weighed on Results

Peloton’s revenue was a major sticking point in the quarter. The company reported roughly $657 million in revenue, down nearly 3% year over year (YOY) and below analyst estimates of about $675 million.

The shortfall was largely driven by weaker-than-expected equipment sales to existing members and longer-than-expected delivery times. The company also reported a decline of approximately 7% in its subscriber base over the previous year.

The drop in equipment sales, in particular, led Peloton to lower its full-year revenue outlook by $30 million, implying a YOY decline of about 3% at the midpoint.

On the bottom line, Peloton reported a loss of 9 cents per share. While that was a notable improvement from a 24-cent loss a year earlier, it still missed expectations for a 7-cent loss.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was a bright spot as the company reported $81 million in adjusted EBITDA, up 39% YOY and at the high end of its guidance range. Gross margins also improved over the previous year, topping 50% and exceeding expectations.

Peloton raised its fiscal year 2026 (FY2026) total gross margin guidance by 100 basis points to around 53% and boosted its adjusted EBITDA outlook by $25 million to a range of $450 million to $500 million.

PTON Sinks After Earnings But Rebounds Sharply

On the same day as the earnings release, Peloton also announced that Chief Financial Officer Liz Coddington would be leaving the company the following month.

The leadership change, combined with softer-than-expected revenue, a decline in paid subscribers, and reduced revenue guidance, triggered a sharp sell-off, with shares falling more than 25% following the news.

The stock has remained volatile since, falling as low as $3.65 in mid-March before rebounding above $5 a month later.

Over the last month, Peloton’s 30% jump has outpaced the leisure and recreational products industry, which is up less than 2%. For the year, however, Peloton is down more tha 10%, compared with the industry, which is up more than 8%.

Current Valuation May Mean Room for Upside

At the current price, Peloton shares may be undervalued. The stock is trading at a price-to-sales (P/S) ratio of 0.83, indicating investors are paying less than 1X revenue to own PTON. That’s below the leisure and recreation industry, which is trading at a P/S of 1.17, and the consumer discretionary sector, which is trading at a P/S of 3.32.

The key question now is whether Peloton can execute well enough to justify a higher valuation. That will depend on how the company continues to manage its transition from a fitness-focused business to a broader wellness platform.

If Peloton can execute and deliver more consistent revenue, it could send the stock higher, helping it meet analyst expectations and deliver meaningful upside for investors.

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