Two years since Barry McCarthy took the reins as Peloton Interactive’s CEO, the company’s stock has taken a nosedive, sliding to new all-time lows. The hopes pinned on McCarthy’s turnaround plan appear misplaced, prompting questions about the potential for an Apple buyout as a last-ditch effort for Peloton.
Peloton’s Turnaround Struggles
Peloton’s recent efforts have yielded mixed results. While the bike rental program and partnerships with Amazon and Dick’s Sporting Goods have shown promise, other initiatives, such as a co-branded bike with the University of Michigan, faltered. McCarthy also acknowledged shortcomings in member support and product innovation.
Extended Timeline for Growth and Cash Flow
McCarthy’s initial goals for Peloton – revenue growth and generating free cash flows – have been pushed further into the future. The company now anticipates achieving free cash flow positivity in fiscal Q4 of this year, and revenue growth isn’t expected until the same period.
Analysts’ Outlook on PTON Stock
Analysts have long been disillusioned with Peloton, and the company’s underwhelming 2024 guidance failed to sway Wall Street. Despite a consensus “Hold” rating, the mean target price for PTON stock stands nearly 67% higher than its recent closing price.
Apple’s Potential Interest in Acquiring Peloton
Rumors of Apple’s interest in buying Peloton have gained traction, with the tech behemoth’s CEO Tim Cook previously expressing a focus on revolutionizing healthcare. Speculation further intensified when Gene Munster of Deepwater Asset Management suggested that an Apple-Peloton union could align with Apple’s subscription growth strategy.
Past rumored suitors for Peloton include Amazon and Nike, underscoring the industry’s allure for tech giants. The possibility of a buyout has sparked polarizing views, but in a landscape where major tech players increasingly eye the healthcare realm, Peloton might still find a suitor.