This summer I wrote an article on what went wrong with Peloton that caused the stock to fall from $162 in January 2021 to $7 just 2 years later (a depressing 95% drop). Which for reference, is an even bigger collapse than what happened to Bed Bath & Beyond before it got kicked out of every strip mall in America.

And let’s not forget John Foley, the former CEO, who went from being a billionaire to getting booted out of his own company… only to reappear in the most unexpected way: selling luxury rugs. (Yes, really. If you ever wanted to work out while standing on a $10,000 woven masterpiece, he’s your guy.)

But stay with me here… because as crazy as it sounds, Peloton might actually have some life left. And dare I say it… it might even be worth a second look.

After years of absolute chaos (supply chain nightmares, overpriced bikes, a recall fiasco, and that infamous Sex and the City disaster where Mr. Big literally died after using a Peloton) the company is attempting a turnaround.

New CEO Peter Stern, formerly of Apple and Ford, has stepped in with a game plan… get rid of the hardware focus because, let’s be honest, how many people are still buying $2,500 bikes with these interest rates? Instead, the company is going all-in on subscriptions (where the real money is) and cutting costs like crazy because spending like it’s 2020 doesn’t work in 2024.

And while I love a good Peloton joke as much as the next person, I have to admit… it’s kinda working. Peloton’s Q4 2024 results weren’t a total crapshoot. In fact, they were decent. Revenue came in at $673.9 million, beating estimates by 2.9%. Free cash flow hit $106 million, a massive improvement from the -$37.2 million disaster of last year. Operating margin climbed to -6.8%, which might not sound impressive until you realize it was -25.2% a year ago. And adjusted EBITDA (the stat that every wannabe entrepreneur on twitter goes pants off about) was $58.4 million… more than double what analysts expected.

All this to say, Peloton isn’t profitable yet, but it’s losing way less money than before. And for a company like Peloton, losing less money can actually be a bullish signal. Which is probably why the stock is up 17% this morning. 

Look, I’m not saying Peloton is gonna have a Tesla-like recovery, but the stock might be worth a second look for a few reasons. For starters, subscription revenue is growing. Peloton is all in on being a subscription-first company. With 2.88 million connected fitness subscribers, they’re proving that people are still willing to pay for the experience (if you’ve ever actually tried one of their bikes out you know they’re great machines). Better yet, the company raised its 2025 profit forecast, expecting up to $350 million in core earnings… a big jump from previous expectations.

Cost-cutting is also working. Peloton has been going Dave Ramsey on eliminating any expenses that they can. With sales and marketing down 34%, general and administrative costs down 18%, and R&D spending slashed by 25%. This has led to a massive improvement in cash flow, which actually matters when trying to survive a near-death experience.

Then there’s the valuation. At its peak, Peloton was trading at a price-to-sales ratio of 4.3. And today, it’s just 1.4 (can someone say BARGAIN?).

For all its progress, Peloton still has problems. Hardware sales are still falling, dropping 21% last quarter alone. Subscriber churn is real, with 125,000 customers bailing year-over-year. And competition is brutal, with Apple Fitness+, Lululemon, and even free YouTube workouts eating into its market. And let’s not forget… this stock is still down 94% from its peak (but the nice thing about rock bottom is you can’t go any lower).

If you’re looking for a sure thing? Absolutely not. If you’re looking for a speculative rebound play on a company that has cut costs, improved margins, and might actually have a path to profitability? Then maaaybe… but only if you’re willing to stomach the risk. At the very least, Peloton is no longer a total joke. And considering where it was just a year ago, that’s already a huge win. What do you think? Is Peloton on the mend, or is it just another overpriced relic from the pandemic era?

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Stock.News has positions in Apple, Ford, and Tesla.