Peloton advances after launch of its most affordable treadmill ever

Peloton Interactive, a mid-cap maker of fitness equipment, gained 1.5% on Nasdaq on Tuesday. The company, which has historically priced its products at a premium, announced the launch of its most affordable treadmill ever. “This is all about us becoming as famous for running as we are for cycling,” Peloton CEO Peter Stern said in an interview with Yahoo Finance.

Peloton shares rose 1.5% on Tuesday to $5.00 apiece. They continued to edge higher in Wednesday’s premarket trading. The gains came after the company announced the launch of three treadmill models. The centerpiece is Tread Flex, Peloton’s first folding treadmill and its most affordable ever, according to the press release. It will cost $2,195, which is $1,100 less than the manufacturer’s previous cheapest model, Barron’s notes.

Tread Flex opens up “all new market segments” for the company, Stern told Yahoo Finance. The two other models, Peloton Tread Vision and Peloton Tread+ Vision, can track users’ movements. Tread+ Vision also uses AI-powered Peloton IQ to provide personalized feedback.

“We are seeing an absolute surge in excitement over running. There’s record marathon attendance, there are local run clubs popping up everywhere... So, to answer your question, this is all about us becoming as famous for running as we are for cycling,” Stern said.

Investors are likely hoping that a less expensive model will help Peloton to boost demand for its products, Barron’s notes. The business flourished during pandemic-era lockdowns, but sales declined once the restrictions were lifted and consumers returned to gyms. That weighed on Peloton’s revenue, which has fallen every year since peaking at $4.02 billion in fiscal 2021 (ended June 30, 2021).

To turn the business around, Peloton unveiled a restructuring plan in May 2024 and later appointed Stern CEO. Since then, the company has developed an AI innovation strategy, launched an updated equipment lineup featuring its AI- and computer vision-powered Peloton IQ system, entered into a partnership with streaming service Spotify, and announced the acquisition of Pilates start-up Skōp.

Despite those efforts, the company’s revenue for fiscal 2026 declined 2% to $2.4 billion. Still, Peloton delivered its “first full year of net profitability,” Stern pointed out. Net income totaled $63.2 million versus a net loss of $118.9 million in fiscal 2025. The management’s top-line outlook for the current fiscal year also implies a decline of around 3.9%.

Peloton shares have plunged 18.5% year to date. Wall Street is broadly cautious on the stock: it has nine “hold” ratings, nine “buy” calls, and two “sell” recommendations. The average target price of $7.90 per share implies 58% upside from the last close.