How Peloton’s New CEO and Shrinking Sales Yet Risi
Peloton Interactive recently appointed Peter Stern as its fourth CEO in five years, as the company continues to experience declining revenue but improving profitability and expects these trends to persist into 2026.
This combination of leadership turnover and a business profile marked by shrinking sales yet better margins raises fresh questions about Peloton’s long-term direction and execution priorities.
We’ll now examine how the appointment of Peter Stern amid ongoing revenue decline may reshape Peloton’s investment narrative and risk profile.
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Peloton Interactive Investment Narrative RecapTo own Peloton today, you need to believe the company can turn shrinking hardware and subscription revenue into a durable, higher margin fitness platform under yet another new leader. Peter Stern’s appointment as the fourth CEO in five years does not materially change the near term catalyst, which still centers on sustaining recent profitability improvements, but it heightens the existing execution risk around stabilizing demand and rebuilding member growth.
Among recent updates, Peloton’s FY2025 and early FY2026 results are most relevant here, with revenue trending lower while net income has turned modestly positive and guidance points to continued revenue pressure into 2026. Against that backdrop, Stern’s arrival effectively becomes a test of whether Peloton can keep improving margins without further eroding its subscriber base or over relying on discounts to support hardware and app adoption.
But investors should be aware that the more Peloton leans on promotions and price cuts to support demand, the more it risks...
Peloton Interactive's narrative projects $2.5 billion revenue and $113.2 million earnings by 2028. This requires revenue to decline by 0.4% per year and an earnings increase of about $232 million from -$118.9 million today.
Uncover how Peloton Interactive's forecasts yield a $10.43 fair value, a 59% upside to its current price.
Exploring Other Perspectives
Seven fair value estimates from the Simply Wall St Community span roughly US$6 to about US$20 per share, showing a wide spread of opinions. Against that backdrop, Peloton’s pattern of declining hardware and subscription volumes highlights how differently investors can weigh demand risk, so it is worth examining several viewpoints before deciding how resilient the business really is.
Explore 7 other fair value estimates on Peloton Interactive - why the stock might be worth over 3x more than the current price!
Build Your Own Peloton Interactive NarrativeDisagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.
A great starting point for your Peloton Interactive research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
Our free Peloton Interactive research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Peloton Interactive's overall financial health at a glance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.