Peloton Interactive stock is showing negative momentum, down 45.6% since January when it was at its highest point.

Pelton stock, even with the catalysts, is very compelling for investors who don’t have a way to hedge against an increase in COVID-19-related pandemic.

While the Delta wave might be at its peak, the pandemic remains far from over. Health experts might not be able to provide a timeframe for the end of the pandemic.

PTON stock is my bullish pick. It looks like it will touch its 52 week lows in the coming weeks. (See PTON stock charts on TipRanks)

Peloton Remains Tough to Get Behind

With recent insider selling activity, and a number of skeptical analysts, investors looking to catch the falling knife had better be ready to average down as selling pressure could easily intensify.

UBS analyst Eric Sheridan has reiterated his Sell rating of Peloton stock due to valuation concerns. The Street’s $70 target price for the name represents 24.8% potential downside.

PTON stock is somewhat volatile at 7.4x sales. Even more so when you consider the fact that most people who start their own home gyms already have had enough opportunities to purchase a bicycle.

The stock price is still very affordable if you consider Peloton more of an technology company than a manufacturer of a commodity good. The stock may actually be quite cheap.

Peloton could get a second wind.

Peloton may be suffering sales pressures as more gyms open with or without vaccination passports.

The recent 20% price drop on the flagship Peloton stationary bike may offset these sales pressures. The move may push Peloton stocks further away from profitability but it appears prudent. Why is this?

Peloton makes more than just equipment for fitness. Peloton is a tech company that has a growing list of subscribers.

Peloton is extremely sticky, and plans are in place to include video games. This is a growing ecosystem and investors need to forgive PTON for their low profits or high valuation.

Wall Street’s Take

According to TipRanks’ consensus analyst rating, PTON stock comes in as a Moderate Buy. There are 22 analyst ratings. 16 Buy recommendations and five Hold recommendations. One Sell recommendation is included.

The average PTON price target is $130.10, which implies 40% upside potential.

Disclosure: Joey Frenette did not hold shares in the mentioned companies at publication.

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