Peloton expected to issue conservative outlook for fiscal 2027, says UBS

Peloton expected to issue conservative outlook for fiscal 2027, says UBS

Mon, July 27, 2026 at 10:29 PM GMT+3 2 min read

• PTON +4.63%
• UBS -0.97%

Peloton Interactive Inc (NASDAQ:PTON) is expected to deliver a slightly better-than-expected fourth quarter but provide conservative fiscal 2027 guidance when it reports results, according to UBS analysts.

UBS, which rates the stock 'Buy' with an $11 price target, expects fourth quarter revenue of $595 million, slightly above the midpoint of the company's guidance range of $582 million to $602 million.

The firm forecasts adjusted EBITDA of $158 million, ahead of consensus expectations of $152 million, and connected fitness subscribers of 2.562 million, broadly in line with Wall Street estimates.

The analysts expect fiscal 2027 guidance to include a mid-single-digit decline in subscribers of about 4%, compared with the Street's expectation of a 4.9% decline. UBS also projects revenue to fall about 1%, versus consensus expectations for roughly flat revenue, while forecasting adjusted EBITDA of $526 million, above the Street estimate of $504 million.

UBS wrote that investor attention is likely to center on subscriber churn, the company's ability to navigate tougher comparisons in its commercial business, and its capital allocation plans.

The firm highlighted Peloton's balance sheet flexibility, citing a net debt ratio of about 0.4x and annualized free cash flow exceeding $300 million. UBS expects the company, following the expiration of a prepayment penalty on its term loan, to lower interest expense and reassess capital allocation, including potential investments in the business or share repurchases. It also expects Peloton to continue reducing equity dilution from stock-based compensation.

UBS's analysis of Peloton's digital engagement pointed to modest improvements in June and July. Interactive website visits declined 10% year over year in June, an improvement from declines of 13% to 14% in April and May, while app download and usage trends also showed signs of stabilization after weaker performance earlier in the year.

While subscriber growth may take time to return to equilibrium, the analysts continue to see an attractive risk-reward profile for the shares.

Shares of Peloton are little changed this year, trading hands at about $6.