Peloton Interactive (PTON) PT Raised to $53 at JMP Securities as Revenue Drivers Outperform

JMP Securities analyst Ronald Josey raised the price target on Peloton Interactive (NASDAQ: PTON) to $53.00 (from $43.00) while maintaining a Market Outperform rating after the company reported financial results that beat expectations and included several key behind the scenes revenue drivers:

• Digital Subscribers ended 2Q at 176K (+64% Y/Y), since extending the free trial window to 90 days in mid-March
• Total Connected Fitness Subscribers reached 886.1K (+93.8% Y/Y) with a churn rate of 0.46% indicating demand is far outstripping supply which should improve profitability
• Demographics are expanding as Users age 35 years and under account for ~30% of sales, up from ~20% a year ago, and HHs with income under $100K now account for 50%+ of FY YTD sales

The analyst stated "Users 35 years and under now account for just under 30% of sales, up from ~20% a year ago, and HHs with income under $100K now account for 50%+ of FY YTD sales. Said another way, Peloton’s addressable market is expanding and we believe its Home Trial and financing plans make the service more affordable—and typically less expensive—than traditional gyms and/or Studios".

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