Peloton Interactive, Inc. (PTON): A Bull Case Theory

We came across a bullish thesis on Peloton Interactive, Inc. (PTON) on TSOH Investment Research’s Substack. In this article, we will summarize the bulls’ thesis on PTON. Peloton Interactive, Inc. (PTON)’s share was trading at $6.60 as of 2^nd June. PTON’s forward P/E was 26.60 according to Yahoo Finance.

Peloton’s journey since Barry McCarthy took over as CEO in May 2022 has been marked by significant transformation. In his departure letter in May 2024, McCarthy emphasized the three priorities he had set: stabilizing cash flow, getting the right talent in place, and returning to growth. While the first two goals were achieved, the third—growth—remains elusive.

For fiscal year 2024, Peloton is projected to post nearly a 10% revenue decline, bringing total revenues to approximately $2.47 billion. This represents the fourth straight year of revenue contraction, amounting to a ~40% cumulative decline from its $4.0 billion peak in 2021. These numbers highlight the extent to which Peloton has struggled to reverse its post-pandemic slowdown and reposition itself as a growing enterprise. However, within this reset lies a potentially compelling opportunity for long-term investors. The segment-level results over the past five years reveal a company that has undergone a fundamental shift in both its financials and strategic direction.

While the earlier hyper-growth narrative has unraveled, what remains is a more disciplined and restructured business that could benefit from a more stable foundation. With a new leadership slate likely to pursue a different strategic approach, a clean slate in FY25, and a significantly reduced valuation, the company could become an attractive turnaround candidate. If Peloton can effectively align its product, pricing, and subscription strategies with evolving consumer demand, it may reignite growth and reward patient investors willing to look past the near-term challenges toward a more sustainable long-term trajectory.

Previously, we have covered PTON in March 2025 wherein we summarized a bullish thesis by another source, Open Insights on Substack. The author highlighted that Peloton beat Q2 expectations and raised FY25 guidance, driven by cost cuts and strong subscriber retention. Bulls saw upside to $10–$15 per share, citing improving cash flow, low churn, and potential price increases.

Peloton Interactive, Inc. (PTON) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held PTON at the end of the first quarter which was 49 in the previous quarter. While we acknowledge the potential of PTON as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.