It may be time to buy shares of Peloton after the company's most recent quarterly earnings disappointment, according to JMP Securities. Analyst Andrew Boone upgraded shares of Peloton to market outperform from market perform, saying in a Wednesday note to clients that the risk-reward profile for the fitness equipment maker appears favorable. "Given our view that Peloton's Connected Fitness workout experience is best in class and that Peloton can continue to take share from gyms ... we are looking through current revenue visibility issues and upgrading shares," Boone wrote. JMP established a $25 price target, representing more than 90% upside from Tuesday's closing price. Peloton shares have been under pressure this year, falling more than 63% as demand for the company's bikes falls. On Tuesday, Peloton reported that it burned through cash while inventory piled up in its warehouses. The company also posted weaker-than-expected results for its most recent quarter, sending Peloton shares down more than 8%. Still, analysts believe Peloton offers a fantastic user experience and convenience at a lower cost to boutique fitness classes. They also expect several factors will accelerate growth at Peloton, including subscription price hikes, a rollout of the bike rental service One Peloton Club to more states, and accelerating expansion of the business. "We believe growth expectations have now been sufficiently reduced and we note our 2023 revenue estimate is roughly unchanged," Boone wrote. Shares of Peloton jumped nearly 4% in Wednesday premarket trading. — CNBC's Michael Bloom contributed to this report.
It may be time to buy shares of Peloton after the company's most recent quarterly earnings disappointment, according to JMP Securities.