Ahead of the new trading week, Peloton shares closed at $6.84, up 1.86% on the day. However, market attention has shifted away from short-term price movements toward a significant development in the competitive landscape: former Peloton CEO Barry McCarthy has officially joined the board of rival platform Strava.

The appointment comes as Strava has confidentially filed for an initial public offering (IPO), targeting a listing in spring 2026. Within the industry, the move is widely seen as symbolic, underscoring the accelerating divergence between two strategic paths in the global fitness market.

Two Companies, Two Distinct Business Models

Barry McCarthy previously led Peloton’s post-pandemic restructuring, with a mandate to reduce costs, stabilize cash flow, and transition the company away from a hardware-dependent model toward one centered on subscription-based content and services. Peloton’s historical financial statements suggest that this strategic shift has already reshaped its revenue structure.

Over the past several fiscal years, Peloton’s Subscription & Services segment has consistently accounted for a substantial portion of total revenue. According to publicly available filings, in certain fiscal years and quarters, subscription and related service revenue represented roughly two-thirds of total revenue, while delivering significantly higher gross margins than hardware sales. Although fitness equipment remains a critical user acquisition channel, content subscriptions have become a core pillar of Peloton’s business model.

From this perspective, Strava represents not a peripheral threat, but a direct competitor targeting Peloton’s core subscription and content value proposition.

Widening Gaps in Growth and Valuation

Unlike Peloton, Strava has virtually no reliance on fitness hardware sales, allowing the company to allocate resources more heavily toward content development, user experience, community engagement, and customer service.

Data indicates that Strava’s revenue grew by more than 50% year-over-year in 2025, approaching $500 million, and the company has already reached profitability. By comparison, Peloton reported approximately $2.4 billion in revenue for fiscal year 2025. The contrast in growth trajectories and business structures is increasingly reflected in market valuation expectations.

• Peloton currently carries a market capitalization of approximately $2.8 billion, with its shares trading in a 52-week range of $4.63 to $10.25. In FY26 Q1, the company reported earnings per share of $0.03, signaling improved profitability, though revenue growth remains under pressure.

• Strava was valued at approximately $2.2 billion in private markets in 2025. If its IPO proceeds as planned in 2026, its public market valuation could directly rival—or potentially surpass—that of Peloton.

As a result, investors are increasingly reassessing whether fitness companies built on “light hardware or no hardware at all, combined with subscription- and content-driven models,” offer greater long-term valuation upside.

The Next Test Lies Ahead for Peloton

For Peloton, the next critical milestone will be the release of its FY26 Q2 earnings on February 10, 2026. Investors will closely examine whether the company can:

• Stabilize or reverse its revenue decline;

• Further strengthen the contribution of subscription and service revenues to overall profitability.

Current analyst consensus projects full-year FY26 earnings per share of approximately $0.11, suggesting that the market acknowledges Peloton’s progress in stabilizing its business. However, confidence in a return to sustained growth remains cautious.