Peloton Interactive, Inc. (PTON)

Price$4.92Cached quoteAs of 2026-10-05 08:06 UTC

AI: Undervalued

Price checkThe stock looks inexpensive against current cash generation, but shrinking subscriptions keep the discount understandable.

At roughly $2.2 billion of equity value, fiscal 2026 free cash flow of $378 million implies a high-teens free-cash-flow yield, meaning investors receive unusually large annual cash generation relative to the market value. Enterprise value is only about five times adjusted EBITDA, also low for a subscription-heavy business. I therefore lean Undervalued, not because growth is strong, but because the market appears to price in a meaningful erosion of today’s cash flow.

Big picturePeloton has become profitable and cash generative, yet management still expects another year of revenue decline.

Fiscal 2026 produced $63 million of GAAP net income and $378 million of free cash flow, while management guides fiscal 2027 free cash flow to at least $350 million despite revenue expected to fall about 4%. That is encouraging cash durability. The catch is cyclicality: hardware is a discretionary purchase exposed to consumer confidence, financing costs, product refreshes, and shifting fitness habits. Connected Fitness subscriptions are also expected to decline roughly 10% year over year in the first fiscal quarter, keeping the turnaround incomplete.

Business strengthHigh-margin subscriptions and better cost control support cash flow, but debt costs and dilution still matter.

Subscription gross margin reached 71.4% for fiscal 2026, giving Peloton a valuable recurring-revenue engine even as subscriber counts shrink. Liquidity is much healthier: cash and equivalents were about $1.21 billion against $1.33 billion of gross principal debt, after repaying the remaining 2026 notes. Still, the term loan carried a 10.2% effective rate and large maturities cluster in 2029. Stock-based compensation was about $199 million, and shares outstanding rose materially year over year, so dilution remains a real per-share drag.

What could change the storyThe bull case needs stabilization and new growth; the bear case needs only continued subscriber erosion.

A bullish path is concrete: fiscal 2027 free cash flow stays above management’s floor, Connected Fitness churn improves, commercial equipment, Spotify distribution, microstores, Peloton IQ, and new product categories restart revenue growth, while refinancing lowers interest costs. A bearish path is equally clear: subscriptions keep falling near current rates, hardware demand remains weak, new categories require spending without enough sales, or refinancing leaves expensive debt in place. With no dividend or buyback history, debt reduction and disciplined reinvestment are the most credible near-term capital-allocation priorities.

AI: News

Fiscal 2026 Turns ProfitablePeloton posted its first profitable full year, with stronger cash flow but continued subscription contraction.

On August 6, Peloton reported fiscal 2026 revenue of $2.446 billion, GAAP net income of $63 million, and free cash flow of $378 million. Paid Connected Fitness subscriptions ended at 2.553 million, down 8.8% year over year. Management expects fiscal 2027 revenue to decline at the midpoint, but adjusted EBITDA to rise and free cash flow to remain at least $350 million. That combination reinforces the cost-led turnaround while leaving top-line recovery unproven.

Shareholder Suit DismissedA federal judge dismissed a pandemic-era investor lawsuit, removing one legal overhang without changing business fundamentals.

On August 27, a federal judge dismissed a shareholder lawsuit alleging Peloton had misled investors about excess inventory and post-pandemic demand. The court found investors had not sufficiently shown fraudulent intent behind the challenged statements. The ruling removes one legal overhang tied to the company’s pandemic-era collapse, although it does not change the operating questions around subscriber growth, product demand, or the current capital structure.

Morgan Stanley Turns BearishMorgan Stanley downgraded Peloton, citing gym momentum, strength-training competition, and doubts about subscriber stabilization.

On September 8, Morgan Stanley downgraded Peloton to Underweight, arguing that stronger gym attendance and consumer interest in strength training increase pressure on the at-home cardio model. The firm also challenged more optimistic assumptions that new subscriber additions can catch up with churn over the next few years. The call matters because it puts the central bear case in plain terms: Peloton may preserve cash flow while still struggling to rebuild its subscriber base.

Spotify Expands Digital ReachSpotify began distributing Peloton workouts globally, widening brand exposure beyond owners of Peloton hardware.

On April 27, Spotify launched a fitness category that includes more than 1,400 Peloton classes for Premium users in supported markets. The partnership gives Peloton global distribution beyond owners of its connected hardware and offers a low-capital way to introduce instructors and programming to new audiences. The strategic upside is broader brand reach and potential future conversion into Peloton products or services; the uncertainty is whether that exposure produces enough direct monetization or subscriber growth to change the declining core trend.

Loading local price history

Revenue

2018

2019

2020

2021

2022

2023

2024

2025

2026

Net income

2018

2019

2020

2021

2022

2023

2024

2025

2026

Free cash flow

2018

2019

2020

2021

2022

2023

2024

2025

2026

Total cash / debt

CashTotal debt

2018

2019

2020

2021

2022

2023

2024

2025

2026

Financial statements

	2026	2025	2024	2023	2022	2021	2020	2019	2018
Revenue	$2.45B	$2.49B	$2.70B	$2.80B	$3.58B	$4.02B	$1.83B	$915.0M	$435.0M
Gross profit	$1.29B	$1.27B	$1.21B	$923.5M	$698.4M	$1.45B	$837.7M	$383.6M	$189.6M
Gross margin	52.60%	50.92%	44.68%	32.98%	19.50%	36.16%	45.88%	41.92%	43.59%
Research & development	$242.8M	$234.2M	$304.8M	$318.4M	$359.5M	$247.6M	$89.1M	$54.8M	$23.4M
Operating expenses	$1.13B	$1.30B	$1.74B	$2.12B	$3.43B	$1.64B	$918.4M	$585.8M	$237.1M
Operating income	$160.7M	−$36.2M	−$529.0M	−$1.20B	−$2.73B	−$187.8M	−$80.7M	−$202.3M	−$47.5M
Operating margin	6.57%	−1.45%	−19.59%	−42.75%	−76.32%	−4.67%	−4.42%	−22.11%	−10.92%
EBITDA	$217.9M	$53.5M	−$420.2M	−$1.07B	−$2.59B	−$124.0M	−$40.5M	−$180.6M	−$40.9M
EBITDA margin	8.91%	2.15%	−15.56%	−38.31%	−72.34%	−3.08%	−2.22%	−19.74%	−9.40%
Net income	$63.2M	−$118.9M	−$551.9M	−$1.26B	−$2.83B	−$189.0M	−$71.6M	−$195.6M	−$47.9M
Net profit margin	2.58%	−4.77%	−20.44%	−45.06%	−78.94%	−4.70%	−3.92%	−21.38%	−11.01%
Basic EPSper basic share	$0.15	-$0.30	-$1.51	-$3.64	-$8.77	-$0.64	-$0.32	-$10.72	-$2.18
Diluted EPSper diluted share	$0.14	-$0.30	-$1.51	-$3.64	-$8.77	-$0.64	-$0.32	-$10.72	-$2.18

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

15.38%of listed shares

BlackRock, Inc.65.03M shares · Jun 30, 2026

View holders

Top 20 reported holders of PTON
Holder	% owned
BlackRock, Inc.	15.38%65.03M shares
DNB Asset Management AS	9.01%38.12M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	5.73%24.24M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.44%18.77M shares
D. E. Shaw & Co., Inc.	4.03%17.05M shares
STATE STREET CORP	3.82%16.14M shares
Quinn Opportunity Partners LLC	3.16%13.37M shares
T. Rowe Price Investment Management, Inc.	3.04%12.83M shares
GEODE CAPITAL MANAGEMENT, LLC	2.56%10.81M shares
Nantahala Capital Management, LLC	2.42%10.22M shares
Pale Fire Capital SE	1.83%7.73M shares
Hoag Jay C	≈1.51%6.39M shares
GOLDMAN SACHS GROUP INC	1.37%5.8M shares
SUSQUEHANNA INTERNATIONAL GROUP, LLP	1.16%4.92M shares
Alyeska Investment Group, L.P.	1.12%4.74M shares
UBS Group AG	1.11%4.69M shares
RENAISSANCE TECHNOLOGIES LLC	1.10%4.64M shares
AQR CAPITAL MANAGEMENT LLC	1.08%4.58M shares
MORGAN STANLEY	1.06%4.5M shares
HENNESSY ADVISORS INC	1.06%4.49M shares

Percentages use 422.8M shares of this listed class outstanding on Jun 30, 2026. ≈ compares the latest reported holding with a share total from a different date; it is not a confirmed current stake.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys1$133.2K disclosed value

Sells (SEC code S)121$51.39M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 9, 2026Form 4 · 10b5-1	Baig SaqibInterim CFO, CAO	SellClass A Common Stock	5.0K	$5.66	$28.3K	234.0K
May 22, 2026Form 4 · 10b5-1	Baig SaqibInterim CFO, CAO	SellClass A Common Stock	5.0K	$5.45	$27.3K	239.0K
May 20, 2026Form 4 · 10b5-1	Baig SaqibInterim CFO, CAO	SellClass A Common Stock	6.0K	$5.19	$31.0K	244.0K
May 20, 2026Form 4 · 10b5-1	Sanders Dion C.Chief Commercial Officer	SellClass A Common Stock	112.5K	$5.19	$584.0K	0
May 18, 2026Form 4	Baig SaqibInterim CFO, CAO	SellClass A Common Stock	29.1K	$5.27	$153.2K	250.0K

Review ownership filings at SEC.gov ↗

Community posts

View community

It’s quiet here.

No posts about PTON yet. Start the conversation.

Write the first post

Peloton Interactive, Inc. (PTON)

Financial charts

Financial statements

Owners

Insider buys & sells

Community posts

It’s quiet here.