Shares of Peloton Interactive (NASDAQ:PTON) Inc. reached a new record low on Monday, continuing a downward trend seen over the past few weeks. This follows UBS analyst Arpiné Kocharyan's decision to halve her price target for the home fitness company due to concerns about its subscription prospects.
Kocharyan cut her price target from $8 to $4, despite maintaining a sell rating. This drastic reduction makes her outlook the most pessimistic among the 27 analysts covering the company, according to a survey by FactSet.
Earlier on Monday, Peloton's stock experienced a brief surge of up to 2.9% before falling 1.8% to a new record low by the afternoon. Over the past few weeks, the stock has lost value in 12 of the last 14 trading sessions, culminating in a 34% drop during this period.
This recent decline follows a significant 34.3% drop in August, marking Peloton's worst performance since its 51.9% decline in November 2021 and second-worst since its public launch in September 2019.
Kocharyan had previously reported an encouraging trend in May and June, noting an increase in total interactive visits to Peloton's website. However, this positive trend reversed in July and weakened further in August. Despite higher visitor numbers during these months, possibly due to promotional activities and anticipation of a new app launch, time spent on the site decreased.
Data indicates that time spent per interactive visit is down year over year: July saw a decrease of 10%, following decreases of 8% and 11% in June and May respectively. August also recorded an 11% year-over-year decline.
Given these trends, Kocharyan revised her growth projections for connected-fitness subscribers downwards. She now expects growth of 4% in fiscal 2024 and 7% in fiscal 2025, down from her previous forecast of 11% growth for both years. This casts doubt on whether Peloton will meet the optimistic growth expectations for connected-fitness subscriptions set by Wall Street.
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