Peloton (NASDAQ:PTON) shares plunged more than 9% intra-day today after Wolfe Research downgraded the company to Underperform from Peer Perform with a price target of $6 per share. Key factors behind Wolfe's bearish stance on Peloton include declining demand in the long term, a lack of confidence in new growth initiatives, and an unclear path to achieving sustainable profitability and free cash flow.

The analysts noted concerns about the potential decline in subscriber growth despite the significantly reduced outlook for Peloton's long-term growth. Additionally, the analysts pointed out that the unit economics of the business is deteriorating due to new strategic initiatives and limited pricing power.

Furthermore, Wolfe highlighted that new growth initiatives such as FaaS and Digital are still in progress and their potential contribution to sustained growth and profitability remains uncertain.