Peloton / Youtube- Wall Street analysts are overwhelmingly bullish on Peloton.
- Support for the company comes even after shares tumbled amid outcry over a holiday ad in early December.
- Going forward, Wall Street has a consensus price target that predicts 10% upside for Peloton shares.
- Watch Peloton trade live on Markets Insider.
Even after shares tumbled amid outcry over an ill-received holiday ad, Wall Street analysts are largely bullish on Peloton.
"Peloton has been a meme in the past and it has not hurt trends," wrote Justin Patterson of Raymond James in a note December 3, the day backlash over the company's holiday ad spiked.
"While reactions to the holiday ad are disappointing, we do not expect it will adversely affect holiday demand," Patterson said. He also pointed out that Peloton's UK ad was a success, racking up 6.7 million views in two weeks, as the company is looking to boost its international brand awareness.
Currently, Peloton has 19 "buy" ratings from Wall Street analysts that cover the firm, one "hold" rating, and zero "sell" ratings, according to Bloomberg data. Those analysts have a consensus price target of $33.84, implying roughly 10% upside from where shares are currently trading.
"We continue to believe that Peloton Digital represents a massive growth opportunity as the company expands availability and exploits the potential of a 'Powered by Peloton' platform model," wrote Heath Terry of Goldman Sachs in a December 4 note.
That was the day after backlash over Peloton's holiday ad caused its stock to fall more than 9%.
It's also the same day that the company announced that it would release new AppleWatch and Amazon FireTV applications, and lower the monthly price of Peloton Digital to $12.99 from $19.49. The lower price point is good for Peloton's brand awareness, Terry wrote.
In addition, positive download data and initiatives such as monthly financing and a "Home Trial" program are driving consumers into the holiday season, wrote Eric Sheridan of UBS in a Thursday note.
This is good as the company's path to profitability is "driven by leverage on fixed content and marketing costs on a growing subscriber base," according to UBS.
Peloton isn't currently profitable, but UBS forecasts that it will turn a profit within five years. That's important as investors have become increasingly hesitant of unprofitable unicorns after disappointing performances from other newly public companies such as Uber and Lyft.
Here's what three bullish Wall Street analysts said about Peloton: