Everyone’s Upgrading Peloton Like It’s 2020 All Over Again… I’m Not Taking the Bait

Despite the horror show that’s been Peloton’s stock chart… crashing from its $162 all-time high in 2021 to barely $6 today (roughly the price of a Subway footlong if you skip the chips) the narrative around the company is finally starting to shift.

Just last month, Canaccord Genuity decided to forgive Peloton’s sins and upgraded the stock to "Buy." Of course, it popped 10% on the news… and today Truist is hopping on the hype train. All aboard the "maybe we were too hard on them" express (although seats are still wide open in first class). In a new note, Truist upgraded Peloton to Buy from Hold, initiated an $11 price target on it, and said, “the BS has finally been cleaned up.” Actual quote. Bless them (and bless their ability to say that with a straight face).

Now, to be fair, Peloton has earned a little bit of that cautious optimism. Under new CEO Peter Stern (who took over in January) Peloton actually looks like a company that's learning to live within its means. Stern’s been cutting costs like a Dave Ramsey follower, focusing on cash flow instead of chasing growth at all costs (you know, a strategy that maybe should've crossed their minds before they started offering $2,500 bikes with 39-month financing plans).

And the numbers from fiscal Q2 2025 tells an impressive story: $58 million in adjusted EBITDA, $106 million in free cash flow, and Connected Fitness Product gross margins cracking 12.9% for the first time in three years (which is a minor miracle given the discounts they were handing out during the holidays).

Debt was another bomb that’s been defused. Peloton’s net debt dropped 30% year-over-year, while its net debt-to-adjusted EBITDA ratio shrank from 7x to a more manageable 2.7x. Even bankruptcy chatter is off the table for now (but don’t jinx it).

That said, surviving isn’t the same as thriving. Revenue is still expected to fall about 9% this year before (hopefully) growing by 1.9% in fiscal 2026 (so not even keeping up with inflation). Even less exciting, Peloton’s path forward hinges on subscription price increases, new fees for activating used bikes, momentum from its Strength+ app (already with 220,000 monthly users), and partnerships with Amazon, Fitbit, and Lululemon (aka anyone who will return their calls).

The good thing is that Peloton’s core community remains stubbornly loyal. Net Promoter Scores across Bikes and Treads are topping 70, churn rates are hovering at a low 1.4%, and users engaging in multiple workout types are sticking around even longer.

Still, with shares down about 26% this year and even Domino’s having a down quarter (one of the most consistent businesses know to man), selling $2,000 bikes isn’t exactly an easy pitch (no matter how much motivational screaming is involved).

If you’re asking me, I wouldn’t chase the Peloton rebound just yet. Cleaning up old messes is one thing… building real, durable growth is another. And right now, it still feels like Peloton’s pedaling hard just to stay in place.

PS: The headlines are full of panic… inflation’s too high, the Fed’s asleep at the wheel, and Trump never fails to kill any market momentum with more tariffs. On the surface, it looks like the market’s barely breathing.

But underneath all that noise?

We’re seeing some of the fastest stock moves in years… especially in the small-cap space, where low float and high tension can trigger a 100% pop before lunch. Some are up 200% in under 24 hours… and nobody on CNBC is talking about them.

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