Peloton: JMP Securities previews upcoming CEO announcement for Peloton, anticipates price hikes and cost cuts amid profitability push (4.62)
JMP's Anrew Boone noted, "With Peloton's new CEO expected to be announced at or before the next earnings call, which likely takes place in ~a month, we are previewing what we view as likely changes including a price increase for subscription, further cost cuts, and debt paydown. Interim management has tried to not make changes it views as permanent, giving the incoming CEO flexibility to make decisions based on his or her strategy. To that end, we believe there are obvious permanent moves like price increases, offshoring of talent, and capital allocation decisions coming as he or she settles into the seat. To that end, we are increasing our FY2026 EBITDA estimate by 15% as we identify multiple levers for Peloton to further drive profitability. We maintain our Market Perform rating. Despite the pull forward of demand continuing to be a headwind, Peloton has made significant progress increasing profitability and free cash flow as we continue to view its connected fitness experience as best in class. While we come away from our debt paydown work incrementally positive as there is a path to less than $100M of net debt in FY2027, we remain at Market Perform as we view valuation multiples as capped until subscriber growth returns as we project CF subscriber losses in FY25 and FY26."