So maybe it’s time for Peloton to sell out to a larger company in the sports/athletic sector? Peloton was not immediately available for comment about a possible takeover.
Turnaround before takeover?
Khajuria said that McCarthy needs more time to cut costs and get the business back on track so that Peloton can begin to post positive cash flow.
“Peloton would be more attractive acquisition target after that. So nothing seems imminent in the current environment,” she said.
Analysts at Goldman Sachs also said in a report this week that there is a “heightened focus among investors on potential 2023 operational turnaround stories” and specifically cited Peloton as one of them.
McCarthy appeared at Goldman’s Communacopia tech and media conference this month, and Goldman analysts said he “continued to emphasize Peloton’s strategy for the digital subscription” and that “there was a lot of investor focus on how … to best capitalize on the market opportunity for connected fitness, at-home fitness and digital health.”
So it looks like Wall Street seems willing to give McCarthy a little more time to prove that his strategy to revitalize Peloton, with an increased focus on subscription revenue, can work.