Why Peloton Stock Crashed Today
Key Points
Fitness fans are passing on Peloton's new, higher-priced equipment.
Price hikes drove subscriptions lower.
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Shares of Peloton Interactive (NASDAQ: PTON) plunged on Thursday after the exercise bike and treadmill maker's quarterly results fell short of investors' expectations.
By the close of trading, Peloton's stock price was down more than 25%.
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Image source: Peloton Interactive.
Sluggish sales
Peloton's revenue fell by $17 million to $657 million in its fiscal 2026 second quarter, which ended on Dec. 31. That was $8 million below management's forecast.
Membership price increases contributed to a 7% year-over-year decline in Peloton's paid connected fitness subscriptions to 2.66 million. Sales of the company's new artificial intelligence (AI)-powered -- yet also more expensive -- equipment failed to offset these revenue declines.
Peloton has been relying on price hikes and cost cuts to boost profitability. The company reportedly laid off 11% of its workforce in late January, according to Bloomberg.
Peloton's expense-reduction initiatives helped its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improve to $81 million, up from $58 million in the year-ago period.
Still, Peloton produced a net loss of $39 million, or $0.09 per share, based on generally accepted accounting principles (GAAP). Wall Street had expected a loss of just $0.06 per share.
A lackluster forecast
For its fiscal third quarter, Peloton expects its paid connected fitness subscriptions to decline by roughly 8% year-over-year to between 2.650 million to 2.675 million.
Management also guided for revenue to decrease by about 1% to $605 million to $625 million. That was below Wall Street's estimates of $638 million.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Peloton Interactive. The Motley Fool has a disclosure policy.
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