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Greenlight Capital’s David Einhorn believes that Peloton could see its shares trade as high as $31.50 if the company cuts costs and doubles its current adjusted EBITDA projections. This would represent a substantial increase from its current trading price of around $6.20. Einhorn presented his case at the Robin Hood Investors Conference, highlighting Peloton’s potential for a turnaround and significant upside if it can reach $450 million in EBITDA.

According to Einhorn, Peloton has made strides in right-sizing its operations and improving its financial position. By focusing on its high-margin subscription business, the company could generate more free cash flow and EBITDA without the need for significant growth in its subscriber base. Einhorn emphasized the importance of cost-cutting measures and efficient management to unlock Peloton’s full potential.

Peloton’s recent cost-saving initiatives, including layoffs and restructuring, are expected to result in substantial annual expense reductions by the end of fiscal 2025. The company aims to achieve adjusted EBITDA of $200 million to $250 million by that time, but Einhorn believes that reaching $450 million in EBITDA could lead to a share price between $7.50 and $31.50. He stressed the importance of new leadership at Peloton to drive further cost efficiencies and strategic growth.

Despite challenges in the fitness industry, Peloton retains a loyal customer base and positive reviews. The trend towards home workouts and healthier lifestyles could continue to drive subscriber growth over time. Einhorn’s analysis underscores the potential for Peloton to capitalize on its core strengths and improve its financial performance in the coming years.

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