Peloton shares jump on the back of the Spotify deal. Is the potential exhausted?
Shares of exercise equipment seller Peloton jumped on the back of the Spotify deal / Photo: Facebook / Peloton
Peloton Interactive, a small-cap seller of fitness equipment and creator of fitness content, jumped 2.5% on April 27 - to the maximum since early February. Investors were reacting to the company's announcement of a partnership with streaming service Spotify. Wall Street believes Peloton shares could rise another 48%.
Details
Shares of exercise equipment maker Peloton rose 2.5% to $5.31 on April 27. This is the maximum since the beginning of February.
The company said: its fitness and healthy lifestyle content is now available to Spotify Premium subscribers in most countries where the streaming service is available.
This is a significant step in Peloton's international advancement, the press release said. "Through the partnership, we are instantly expanding our global presence," the company quoted its chief commercial officer, Dion Camp Sanders, as saying.
The deal will drive sales of fitness equipment and content in previously untapped markets, and will solidify Peloton's transition to a more diversified business model, according to a press release.
What's going on with Peloton
This isn't the first year Peloton has struggled to overcome a sales slump following the end of the coronavirus pandemic. Two years ago, in May 2024, the company announced a restructuring plan to reduce annual costs. That's when it announced the appointment of Apple Fitness+ service co-founder Peter Stern as CEO. This led to an increase in the company's quotations by about a third.
A year later, in the summer of 2025, Peloton announced the development of an AI innovation strategy, and in the fall it introduced an updated line of simulators with an integrated AI and computer vision system, Peloton IQ.
"This is the beginning of a new chapter for Peloton," Stern said at the time. - It's not just an upgrade, it's a restart."
His optimism did not convince investors: on the day of the presentation of the new simulators, Peloton's papers fell in price by 10%. It's all about the increase in prices for equipment by an average of 11% and for subscriptions by about 19%, Bloomberg explained.
The company's number of paid subscriptions for the quarter fell 7% year-over-year to 2.66 million, Peloton noted in its most recent quarterly report, which was released in early February. The fitness equipment maker predicted that price increases would cause a more significant drop.
What about the stock
Since the beginning of the year, Peloton shares have fallen 13%. The most notable drop occurred on February 5, the day the company released its quarterly earnings, when Peloton's shares fell almost 26% to $4.39.
After that, Citigroup lowered the target price of the company's securities by almost 40% to $5, Yahoo Finance shows. Around the same time, analysts at Zacks upgraded their recommendation on the fitness equipment maker's shares from "hold" to "buy". They attributed the decision to an increase in Wall Street's consensus forecast for Peloton's earnings per share (EPS).
Buying the company's securities is a risky idea, says Motley Fool freelance analyst Neil Patel. He draws investors' attention to the fact that Peloton is expecting a 3% decline in revenue in fiscal 2026. If that happens, it will be the fifth consecutive year of revenue decline, which Patel believes should be viewed as a trend rather than a temporary hardship.
