Put Traders, Analysts Speculate on Peloton Stock's Future

Peloton Interactive Inc (NASDAQ:PTON) is reviewing its production as well as its workforce size, following a report from CNBC yesterday that the home workout staple would cease production of its bikes and treadmills amid diminished demand. In response, Peloton stock was last seen up 4.6% to trade at $25.33, paring some of the previous session's substantial losses.

The brokerage bunch is in a frenzy to weigh in on the situation. No less than eight analysts have dished out price-target cuts for PTON, with BMO moving the lowest to $24 from $45. And while Stifel also slashed its price objective, the firm upgraded the security to "buy" from "hold." Coming into today, analysts were split toward Peloton stock, with 11 of 21 rating the equity a "buy" or better. Meanwhile, the 12-month consensus target price of $54.12 is a 113.5% premium to current levels, meaning the stock could have additional downgrades and/or price-target coming its way.

Bearish traders are blasting PTON, as well, with 57,000 puts traded in the first hour of today's session -- five times the intraday amount. However, calls are also running at triple the amount typically seen at this point, with 41,000 across the tape. The two most popular contracts by far are the weekly 1/21 25- and 24-strike puts.

Short sellers have been piling on the security of late. Short interest rose 10.7% over the most recent reporting period, and the 28.36 million shares sold short make up 9.7% of the stock's available float. It's also worth noting that the security has made its way onto the Short-Sale Restricted (SSR) list today. 

Yesterday's 24% haircut saw Peloton stock fall below the $25 level for the first time since March 2020 during the broader market's pandemic-induced pullback. The equity was a pandemic darling, as more people moved to workout from home, leading the security to an all-time high of $171.09 in January 2021. It seems its glory days are firmly in the past, as PTON sits 84% lower year-over-year.