Peloton (PTON) Upgraded to Buy: Here's Why

Core Viewpoint - Peloton (PTON) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3] Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [1][2] - Changes in future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [4][6] Institutional Investor Influence - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, impacting their buying or selling decisions, which in turn affects stock prices [4] Business Improvement Indicators - Rising earnings estimates and the Zacks rating upgrade suggest an improvement in Peloton's underlying business, which could lead to higher stock prices as investors respond positively [5][10] Earnings Estimate Revisions for Peloton - Peloton is projected to earn -$0.36 per share for the fiscal year ending June 2025, reflecting a year-over-year change of 76.2% [8] - Over the past three months, the Zacks Consensus Estimate for Peloton has increased by 5.7% [8] Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7] - Peloton's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9][10]