Shares of Peloton Interactive are making a comeback, with the stock up by 30% this year. But many investors who bought into the connected fitness company during the pandemic are still nursing big losses; shares are down 93% from their all-time high in late 2020, currently trading around $10.40. The connected bike and treadmill company, which became a household name during the Covid pandemic as a solution to shuttered gyms, overestimated the demand for its products and services during the pandemic. As the world exited lockdowns and restrictions were lifted, the company faced plummeting sales , a shift in consumer preferences, and a health and safety scandal that led to the resignation of former Chief Executive John Foley. Barry McCarthy, a former executive at Spotify and Netflix, was brought in as the new boss with an aggressive turnaround plan amid a new era of fiscal discipline. Where does Peloton go next? Wall Street analysts are generally bullish on the stock. The consensus price target of 30 analysts ($17) points toward a 63% upside over the next 12 months. JPMorgan analysts said McCarthy’s efforts to pivot Peloton’s business towards a subscription and fitness-as-a-service model appear to be paying off. Early signs of rising revenue and smaller losses were also “encouraging,” the investment bank said. According to FactSet, Peloton improved its free cash flow from negative $747 million in March 2022 to negative $94 million as of the end of its most recent fiscal quarter. “We believe Peloton is well positioned to disrupt the fitness industry through its at-home connected fitness subscription platform, with significant runway for growth as PTON Members only represent ~4% of global gym memberships,” wrote analysts Doug Anmuth and Bryan Smilek in a note to clients, raising their price target to $19 a share. PTON 1Y line JMP Securities analysts said that Peloton sold about 600 bikes on Amazon in February — just 1% of the total orders in the “top 50 best-selling exercise bikes” category. However, due to their higher cost, the orders made up 19% of the total revenue in the category. The analysts concluded that this means “Peloton’s category position is strengthening coming out of Covid as we continue to view Peloton as offering a best-in-class customer experience and hardware product.” Barclays Equity Research analysts, who also have a $19 price target on the stock, noted that margins had improved as subscription sales generated higher revenue than hardware. McCarthy told CNBC in February he didn’t care that the company was losing money on equipment sales, and was focused instead on its mobile app’s earnings. Barclays analysts also noted that the customer churn rate – the percentage of customers canceling their subscriptions – remained low at 1.1%. The Bear Case Not everyone has bought into Peloton’s transformation story, however. UBS analysts doubted the company’s ability to maintain positive free cash flow while continuing to grow. They also noted that digital-only subscriptions, which are separate from the connected fitness subscribers, fell marginally in the latest quarter. “The key question is not whether Peloton can achieve break-even cash flow, in our view: it is whether Peloton can achieve and maintain positive cash flow, were the company to return to growth,” the analysts, who have a sell-rating on the stock, wrote in a note to clients Feb 1. UBS’ price target of $8 represents a more than 20% drop from the current share price. Similarly, Morgan Stanley analysts said big discounts and promotions primarily drove up new subscriber numbers during holidays late last year. “Can current connected fitness unit growth continue at this pace?,” the analysts, who have a $4.50 price target and a hold rating on the stock, asked in a note to clients. “We are skeptical without a similar level of promotional activity.” — CNBC’s Michael Bloom and Gabrielle Fonrouge contributed reporting.