Analyst Says Peloton Could Flash a Buy Signal Soon: What to Watch For

A Peloton show room displays bikes and treadmills in Coral Gables, Fla., on Jan. 20, 2022. Joe Raedle/Getty Images

Peloton Interactive, Inc. shares sank further into negative terrain on Tuesday after it reported disappointing first-quarter results and issued weak guidance.

Further Downside Limited

TFI Securities analyst Ming-Chi Kuo is optimistic that a turnaround could be in the cards.

The analyst noted that Peloton shares have declined nearly 50 percent since April 7, when he tweeted that the company cut all component orders for 2022. A further downside could be limited, the analyst said.

Kuo also provided cues for investors to identify the bottom in the stock.

“The best way to check if $PTON’s worst is over is to keep an eye on when it starts replacing orders,” the analyst said.

Chase The Few Fitness Freaks

Peloton needs to make as much money as possible from the few people who are passionate about fitness, Gene Munster of Loup Funds said. It should target this group with both hardware and software, he added.

“To those members: Peloton is a drug, and they’re willing to pay a lot for it,” Munster said.

The analyst also said the new CEO Barry McCarthy is the right person to turn the company around.

“I was impressed with his pragmatic conference call and conservative outlook,” the analyst said.

He believes that this formula will win over investors in the long run.

Peloton shares, which slumped 8.70 percent to $12.90 on Tuesday, reversed course and traded 5.43 percent higher at $13.60 in the after-hours session, according to BenzingaPro data.

By Shanthi Rexaline

© 2022 The Epoch Times. The Epoch Times does not provide investment advice. All rights reserved.