Needham analyst Bernie McTernan reiterated a Hold rating on Peloton Interactive (NASDAQ: PTON).

The analyst comments "Earlier today PTON announced a licensing deal with SPOT for 1,400 workouts as part of SPOT's deeper entry into fitness. The release was light on financial details, but we think a potential way of thinking about monetization for PTON is similar to SPOT's podcast licensing deals, which would result in a multi-year, high margin, fixed revenue stream to PTON. Historically, major podcast deals have been in the tens of millions of dollars. With consensus at $508M of adj. EBITDA in FY'27E, we think the SPOT deal could be impactful. While we are overall positive on the deal, it does not help our concerns over PTON's ability to grow subscribers on their own platform. While there are safeguards in place to help fight against potential cannibalization, including PTON producing >700 workouts month to date in April vs the 1,400 being sent to SPOT, we think it's important to learn and follow SPOT's fitness aspirations. While PTON content is clearly the headliner in SPOT's fitness category, there are other fitness content creators available too. The risk for PTON would be following a similar path of media companies supplying content to NFLX."

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Shares of Peloton Interactive closed at $5.18 yesterday.