What happened

Shares of Peloton Interactive (NASDAQ:PTON) were up on Monday afternoon after a Wall Street analyst raised his price target for the company's shares and reiterated his bullish take on the business.

As of 2:30 p.m. EDT, Peloton's shares were up about 5.2% from Friday's closing price.

So what

In a note on Monday morning, Stifel Nicolaus analyst Scott Devitt raised his price target for Peloton's stock to $62, from $55, and reiterated his buy rating on the shares. 

Devitt said that he's "incrementally positive" on the company's current momentum, which has increased amid the coronavirus pandemic, and bullish on its long-term opportunity as the leader in the fast-growing, connected-fitness category.

A woman riding a Peloton stationary bicycle at home.

Image source: Peloton Interactive.

Devitt feels that shifting consumer behavior, a wave of gym closures, and steady word-of-mouth-driven demand have the potential to drive "holiday-like"demand for the next few quarters, pulling the company's anticipated profit-margin expansion ahead by two to three years. 

Now what

Peloton has told consumer-discretionary investors to expect that it will have 1.04 to 1.05 million subscribers when its fiscal year ends on June 30, up from about 886,000 on March 31. The company expects revenue of between $510 million and $512 million for its fiscal fourth quarter, down slightly from the $524.6 million it generated in the quarter ended March 31 but more than double its year-ago result. 

Peloton is expected to report its fiscal fourth-quarter and full-year results in early August.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.