Can Peloton Pedal Past Tariffs, Subscriber Slump To Regain Growth In Q4?

Core Viewpoint - Peloton Interactive Inc. is facing significant challenges, including tariffs and sales pressure, as it prepares to report its fourth-quarter and full-year fiscal 2025 earnings, with analysts maintaining a cautious outlook on the company's growth prospects [1][2][3]. Financial Performance - Peloton is expected to report a 9% year-over-year decline in quarterly sales to $586 million, which is at the high end of company guidance and slightly above the FactSet consensus of $581 million [4]. - The company anticipates a near-term impact of approximately $5 million in free cash flow pressure for the fourth quarter due to evolving trade conditions [2]. - Adjusted EBITDA is projected to be $85 million, near the top of the company's implied range of $66 million to $86 million, while gross margin is expected to be 51.4%, trailing the 52.3% consensus [5]. Subscriber and Revenue Trends - Connected fitness subscribers are forecasted to decline by 5.8% year-over-year and 3% sequentially to 2.81 million [5]. - Hardware sales are estimated to drop by 17%, and subscription revenue is expected to decrease by 5% [4]. Strategic Initiatives - The company has implemented strategic changes, including leadership adjustments under CEO Peter Stern, promotional activities during Amazon Prime Day, and potential modifications to the $44 all-access membership fee [3]. - The launch of the Peloton Repowered marketplace is also part of the company's efforts to innovate and retain customers [3]. Analyst Ratings and Market Performance - Telsey Advisory Group analyst Dana Telsey has reiterated a Market Perform rating on Peloton with a price forecast of $8, applying a ~1.5x EV/Sales multiple to the FY26 sales forecast of $2.47 billion [1][4]. - Peloton shares were trading lower by 7.91% to $6.58 at the time of publication [5].