Core Thesis - Peloton Interactive, Inc. is undergoing a significant transformation under new CEO Peter Stern, focusing on profitability and strategic overhaul, with a new product line aimed at enhancing user experience and engagement [2][4][5] Product Innovation - The introduction of the Peloton Cross Training Series features AI-assisted workouts, upgraded hardware, and a built-in movement tracking camera, promoting cross-training and personalized health plans through "Peloton IQ" [2][3] - AI integration is expected to reduce localization costs by translating and dubbing content for international markets [3] Business Model Restructuring - Peloton has shifted its retail model from large stores to smaller mall kiosks and launched "Peloton Repowered" for used equipment [3] - The commercial arm, Precor, is being repositioned to target gyms, hotels, and corporate clients with the new Peloton Pro Series line [3] Market Positioning and Financial Outlook - Stern has repositioned Peloton from a fitness brand to a broader "health and wellness" platform, expanding its addressable market [4] - Despite conservative FY2026 guidance of $2.5 billion in revenue and $425 million in EBITDA, management plans an additional $100 million in cost cuts, indicating potential for outperformance [5] - Peloton raised hardware and subscription prices by 15-20%, expected to add approximately $160 million in EBITDA annually [4] Engagement and Retention - Engagement metrics remain strong, with cancellation rates lower than Netflix's, and subscribers using multiple workout types showing significantly higher retention [4] Investment Sentiment - Peloton is not among the 30 most popular stocks among hedge funds, with 53 hedge fund portfolios holding PTON at the end of Q2, up from 52 in the previous quarter [7] - While Peloton shows potential, certain AI stocks are viewed as having greater upside potential and less downside risk [7]