PTON Stock Jumps on Surprise Peloton Earnings Beat—Should Investors Ride the Rebound or Cash Out Now?

Peloton Interactive’s (NASDAQ: PTON) fourth-quarter and full-year 2025 earnings report has reignited investor interest after months of lackluster trading. The connected-fitness pioneer posted GAAP net income of $21.6 million for Q4 FY25, a dramatic swing from the $30.5 million loss recorded in the same quarter last year. Revenue landed at $606.9 million, topping analyst expectations and signaling that the company’s aggressive cost-cutting plan is finally filtering through to the bottom line. Why the sudden turnaround? Management credited a 270-basis-point expansion in gross margin to 37.4 %, driven by lower freight expenses, a leaner product mix and streamlined marketing spend. Peloton also reported $58 million in adjusted EBITDA, up 171 % year over year, underscoring improving operating leverage. Investors responded quickly: PTON stock jumped as much as 12 % in early Thursday trading before settling near $7.40, its highest intraday level since May. The rally comes despite the shares being down more than 60 % over the past 12 months, reflecting persistent skepticism about Peloton’s ability to reignite top-line growth. Outlook remains conservative but constructive For fiscal 2026, Peloton guided for a 2 % revenue decline to a range of $2.4 billion–$2.5 billion, yet management expects further margin expansion thanks to ongoing cost discipline. The company reiterated its goal of achieving sustained positive free cash flow by the second half of the year, a milestone that could shift the narrative around PTON stock from survival to sustainable recovery. Key metrics to watch • Connected-fitness subscriptions: 6.4 million, up 4 % YoY • Average monthly churn: 1.1 %—a record low, highlighting sticky demand • Inventory: down 28 % YoY, reducing balance-sheet drag • Cash and equivalents: $930 million, providing ample liquidity What it means for traders Short interest in PTON remains elevated at roughly 13 % of float, creating potential for further upside if bullish momentum continues. Options markets are pricing heightened volatility into next week, suggesting traders expect the post-earnings move to persist. Bottom line PTON stock is still a high-risk turnaround play, but the latest earnings print shows tangible progress in profitability and cash flow. If Peloton can keep subscriber churn low while expanding its digital content partnerships, the current rebound could mark the start of a longer-lasting recovery in the once-beleaguered fitness leader’s shares.