UBS doesn’t see evidence of Peloton meeting bull case growth expectations

Peloton’s (NASDAQ:) price target was cut to a Street low of $4 per share from $8 by UBS analysts on Monday. They maintained a Sell rating on the stock.

The analysts told investors in a note that the company’s August web traffic was weaker for interactive visits, while there are increased concerns regarding subscription growth.

“Previously, we had flagged a positive trend in total interactive visits to the Peloton website in May and June, with interactive visits defined as total visits excluding bounced visits (those that enter a site, take no action, and then leave). Our dataset shows that trend turned negative in July,” they explained.

“Most recent data for August shows further weakness. We believe consistent momentum in positive growth in total interactive visits could mean traction in demand, but we are also mindful of significant promotional activity in seasonally slower months and ahead of new app launch that could have temporarily push these metrics higher in June.”

UBS now believes investors are squarely focused on PTON’s 2024 to 2025 connected fitness subscription growth outlook and whether its tiered app membership approach can drive significant conversion. However, UBS “still do not see tangible evidence of PTON meeting bull case growth expectations for connected fitness subs.”