I’ve taken my fair share of shots at Peloton… just like everyone else. From that cringeworthy ad where a woman looked like she was being held hostage by her husband’s $2,000 exercise bike gift, to Sex and the City randomly killing off Mr. Big mid-spin class, to the stock’s hindenburg-level collapse (down 98% from its peak), it’s been an easy punching bag. At one point, I could’ve sworn I saw Peloton’s executive team outside its New York headquarters with a “Spare Change?” sign.

And yet, here we are. Peloton is up 10% this morning after Canaccord Genuity upgraded the stock from Hold to Buy. Apparently, the company is starting to find its footing after what might be one of the roughest five-year stretches in stock market history.

Bright and early this morning (probably after a strong cup of coffee) Canaccord slapped a $10 price target on Peloton, citing improved financial health, a leaner cost structure, and better leverage of its brand in the connected fitness space. Maybe Peloton finally realized that screwing an iPad onto a stationary bike and charging $44 a month for classes wasn’t gonna fly anymore with the price of eggs more expensive than a used car. So, they went full cost-cutting like Elon DOGE-mode… eliminating $600 million in expenses and operating costs.

And let me tell you, shockingly, the numbers don’t look awful… at least by Peloton standards. The company clawed its gross margin back into double digits, shrunk its net loss from $195M to $92M, and transformed a laughable $3.5M in EBITDA for FY24 into a projected $300M-$350M for 2025. On paper, that’s a wild turnaround. And Peloton thinks things will only improve from here, predicting revenue growth in 2026 and a subscriber rebound in 2027, thanks to expansion into new areas like strength training and nutrition. (So I guess Peloton protein powder is next?)

But here’s the issue… for all the financial gymnastics, people aren’t buying as many bikes, and subscribers keep bailing. Revenue is still in decline… down 9% last quarter. And even with all the belt-tightening, Peloton hasn’t proven it can sustain profitability. Eventually, you have to make money, not just cut costs. Subscriber churn is a major red flag. If that trend doesn’t reverse, Peloton reverts back to bankruptcy territory.

Wall Street isn’t fully sold, either. Out of 22 analysts, 18 still rate Peloton as Hold or worse, meaning Canaccord’s call is more of an outlier than a consensus. And it makes sense. When you look at the data, with 15.1% of the stock’s float being shorted, plenty of investors still think Peloton’s comeback is just another false start.

At 1.4x forward sales, the stock looks cheap. If Peloton actually pulls off this turnaround, the stock could see multiple expansion… Wall Street’s way of saying, “Alright, maybe we care again.”

For traders, this setup is at least interesting. Short interest is high, RSI suggests it was oversold, and options volatility is relatively low (meaning a short squeeze or at least a strong bounce could be in play). But as a long-term buy, expecting Peloton to continue reclaiming its former glory is wishful thinking.

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Stock.News does not have positions in companies mentioned.