Peloton Stock Soars 16% Following Billionaire's Undervalued Assessment

Peloton Stock Rallies After Positive Remarks

Shares of Peloton Interactive (NASDAQ: PTON) have surged by 16% after David Einhorn, billionaire and hedge fund manager, called the stock undervalued at Robinhood's (NASDAQ: HOOD) investor conference on October 23. The announcement was made as the Greenlight Capital founder was riding a Peloton bike — previously, in June, the fund had disclosed a $6.8 million stake in the business.

Recent Performance and Setbacks

The home fitness giant's fall from an all-time high (ATH) of $162 during the pandemic was swift and unrelenting — following mismanagement, supply chain disruptions, and factory closures, the stock had lost as much as 97% of its previous value. At press time, Peloton stock is trading at $6.22 — having rallied by 16.27% after Einhorn's bold claim.

Over the last six months, PTON share price has increased by 88.36% — bringing year-to-date (YTD) returns up to 6.80%.

• Key Events:
• CEO Barry McCarthy stepped down; 15% of staff laid off.
• Q3 2024 earnings report showed an EPS of negative $0.45.
• Partnership with Costco announced before Einhorn's comments.

Analyst Opinions and Future Outlook

Wall Street analysts do not share Einhorn's view. At present, eighteen equity researchers issue ratings for the stock. The outlook isn’t entirely bearish — there are 2 'Buy' ratings and 1 'Sell' rating, while 15 'Hold' ratings dominate estimates. The average price target set by these experts is currently $5.02, suggesting a 19.29% downside.

While recovery is possible, Peloton's leadership issues would need to be resolved quickly, followed by a string of solid quarterly performances.