Peloton Stock Crashes After Weak Forecast

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•  05 Feb 2026
 

•   PTON  
   
  -4.15%

$PTON is back under heavy pressure after Peloton stock plunged 22% following a disappointing third-quarter outlook and the announcement that its CFO will step down. For traders and long-term investors alike, the sharp selloff raises a critical question: is this just another overreaction, or a warning that growth challenges are far from over?

Peloton told investors it expects revenue of $605-625 million for the current quarter ending March 31. That represents about a 1% year-over-year decline and a significant miss versus Wall Street expectations near $637-638 million. The company also lowered its full-year forecast, now guiding for up to $2.44 billion in revenue for the fiscal year ending in June, roughly 3% below last year and below analyst estimates.

The market’s reaction was swift. This marked Peloton’s steepest single-day drop in more than two years, adding to an already weak trend. The stock is down about 4% year to date and nearly 29% over the past year, underscoring persistent doubts about the company’s ability to reignite sustainable growth.

The weak outlook follows a disappointing holiday quarter, traditionally a seasonal peak for fitness equipment sales. Revenue for the quarter ending in December came in at $656.5 million, below the roughly $674 million analysts had expected. More importantly, Peloton failed to meet its own internal targets, both in total revenue and in sales of its newly launched product line.

That product line was supposed to mark a turning point. Last fall, Peloton rolled out new bikes and treadmills featuring AI capabilities, tracking cameras, rotating screens, and touch-free controls. It was the company’s first major hardware launch in years and a defining move under new CEO Peter Stern. The expectation was clear: advanced technology would attract new users and bring back former ones.

Instead, demand fell short of projections. Peloton acknowledged that sales of the new products did not deliver the positive momentum investors were hoping for. Compounding the issue, the launch coincided with price increases on both hardware and subscriptions. In a cautious U.S. consumer environment and a home fitness market showing signs of fatigue, higher prices appear to have weighed on demand.

Subscriber trends reinforce that concern. Connected fitness subscribers declined 7%, while app-only subscribers dropped 11%. Management noted that churn was more moderate than feared, even after subscription price hikes in October. However, a significant portion of recent purchases came from existing customers expanding their equipment portfolio rather than from a fresh wave of new users. For growth-focused investors, that distinction matters.

Despite revenue weakness, Peloton’s profitability story is improving. Adjusted EBITDA reached $81.4 million in the latest quarter, up 39% year over year and above analyst expectations. The company raised its full-year adjusted EBITDA outlook to $450-500 million, up from a previous range of $425-475 million. It also expects stronger-than-anticipated operating profitability in the current quarter.

Cost discipline has become a central theme. Peloton recently announced layoffs affecting about 11% of its workforce, primarily in engineering and technology. These cuts are part of a broader efficiency drive that has helped reduce net debt by roughly 52% over the past year. From a balance sheet perspective, the progress is significant. From a growth perspective, investors remain unconvinced.

Adding to the uncertainty is the departure of CFO Liz Coddington, who will remain in the role until March. Leadership transitions at the top of the finance function tend to amplify market anxiety, particularly when they occur during a period of strategic repositioning. Although Peloton has begun the search for a successor, the timing is sensitive.

CEO Peter Stern reiterated that Peloton’s strategy centers on expanding its footprint in the global wellness market while building a stable financial foundation. On paper, the profitability improvements support that narrative. In the market, however, traders are demanding more than margin expansion. They want clear evidence that innovation can translate into renewed top-line growth.

Volatility in PTON may present tactical opportunities, especially as sentiment swings between restructuring optimism and growth skepticism. For long-term investors, the key issue remains whether Peloton can stabilize its subscriber base, reaccelerate demand, and prove that its AI-driven hardware push can move the revenue needle.

Right now, Wall Street is signaling caution. Until revenue growth reappears, profitability alone may not be enough to restore confidence in Peloton’s turnaround story.

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