Shares of Peloton Interactive Inc (NASDAQ: PTON) have been climbing after the company smashed first-quarter sales estimates last week.
The company can generate over $300 million in EBITDA this year and more than $400 million over the next few years, according to BofA Securities.
Analyst Curtis Nagle upgraded the rating for Peloton Interactive from Underperform to Buy, while raising the price target from $3.75 to $9.00.
The Peloton Interactive Thesis: The company reported its fiscal first-quarter EBITDA "much higher than expected" and raised its fiscal 2025 guidance to a range of $240 million to $290 million, Nagle said in the upgrade note.
The full-year guidance appears conversative, "as it implies a deceleration through the year," he added.
"To date, growth initiatives have yet to take hold, but strategies around more personalized offers, more emphasis on the tread market (2x bike) and men (mix grew 9% in F1Q25) and retail distribution could at a minimum stabilize user tends," the analyst wrote.
Peloton CEO Peter Stern sees "a large opportunity for more OPEX cuts, higher hardware margins and subscription price increases."
Price Action: Shares of Peloton Interactive had risen by 6.32% to $7.71 at the time of publication on Monday.