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Peloton & Wish: Could These Battered Stocks Bounce Back in 2025?

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  Published in Stocks and Investing on Sunday, December 28th 2025 at 8:14 GMT by The Motley Fool

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Two Stocks Battered by Recent Headwinds Poised for a Potential Comeback in 2025?

The market hasn’t been kind to every investor lately. Several companies, once considered reliable growth stocks, have experienced significant downturns due to a confluence of factors like changing consumer behavior, macroeconomic pressures, and company-specific challenges. However, according to a recent article on The Motley Fool, two such stocks – Peloton Interactive (PTON) and ContextLogic (WISH) - might be positioning themselves for a potential comeback in 2025. While significant risks remain, the article argues that current valuations reflect pessimism that may prove overly harsh if these companies can execute their turnaround plans.

Peloton: From Hype to Hard Reset & A Path Forward?

The Peloton story is arguably one of the most dramatic shifts in recent market memory. After experiencing explosive growth during the pandemic lockdowns, fueled by a desire for at-home fitness solutions, the company faced a harsh reality as gyms reopened and consumer spending patterns normalized. A combination of production overruns (leading to massive inventory pileups), quality control issues, unsustainable promotional strategies, and a general perception that their pricing was too high contributed to a dramatic stock price decline. As detailed in previous Fool articles, Peloton’s struggles have been well-documented, with multiple CEO changes and significant cost-cutting measures implemented.

The article highlights the current turnaround plan spearheaded by CEO Barry McCarthy. This plan focuses on several key areas: shifting towards a subscription model, emphasizing connected fitness rather than relying solely on equipment sales; expanding into corporate wellness programs, diversifying revenue streams beyond individual consumers; introducing more affordable offerings like Peloton Guide and Bike Roll, addressing price sensitivity; and crucially, reducing inventory levels. The article points to the recent announcement of a strategic partnership with Amazon as potentially transformative. This deal allows Peloton content to be streamed through Amazon’s devices, dramatically expanding its reach and accessibility while generating licensing revenue for Peloton. This is a significant step away from relying solely on their own app and hardware ecosystem.

While the debt load remains a substantial concern – Peloton carries over $1 billion in debt – McCarthy's efforts appear to be starting to yield some positive results. The article notes that subscriber retention rates are improving, and gross margins are showing signs of stabilization. However, it’s crucial to acknowledge the risks. A failure to control costs, continued declines in connected fitness engagement, or increased competition could derail the recovery. Furthermore, as a linked Fool article explains, Peloton's high debt levels make it vulnerable to interest rate hikes and economic downturns. The stock remains highly speculative, but the potential upside if the turnaround succeeds is considerable.

ContextLogic (Wish): Rebuilding Trust & Focusing on Value

ContextLogic, the parent company of online retailer Wish, has faced a different set of challenges. The company built its business model around offering deeply discounted products sourced primarily from Chinese manufacturers and shipped directly to consumers. While this strategy initially attracted price-conscious shoppers, it also led to significant issues with product quality, shipping delays, and misleading advertising practices. These problems resulted in widespread customer dissatisfaction and regulatory scrutiny, ultimately damaging Wish’s reputation and driving away users.

The article emphasizes that the current management team is actively working to address these past failings. Their strategy revolves around three key pillars: improving product quality, implementing stricter vendor vetting processes and enhancing quality control measures; rebuilding trust with customers, focusing on transparency in advertising and providing better customer service; and streamlining operations to improve efficiency and reduce shipping times. They've also shifted away from the aggressive, often misleading marketing tactics that characterized Wish’s earlier years, opting instead for a more value-driven approach.

As detailed in a linked article, ContextLogic has been undergoing significant restructuring, including layoffs and asset sales, to conserve cash and focus on its core business. The company is emphasizing private label brands and working directly with manufacturers to gain greater control over the product lifecycle. The recent introduction of “Wish Studios,” their own branded apparel line, demonstrates a move towards higher-margin products.

Like Peloton, ContextLogic carries significant risks. Rebuilding brand trust takes time and requires consistent execution. The company faces intense competition from established e-commerce giants like Amazon and Walmart. Furthermore, the article acknowledges that the current macroeconomic environment, with rising inflation and potential recessionary pressures, could negatively impact consumer spending on discretionary items. However, if ContextLogic can successfully execute its turnaround plan and regain customer confidence, the stock’s depressed valuation – trading significantly below its historical highs – might offer a compelling opportunity for long-term investors.

The Bottom Line: High Risk, Potential Reward

Both Peloton and ContextLogic represent high-risk, potentially high-reward investment opportunities. The article cautions that these are not suitable for risk-averse investors or those seeking quick profits. Significant challenges remain for both companies, and there's a real possibility that their turnaround efforts could fail. However, if they can successfully navigate the headwinds and execute their respective strategies, these beaten-down stocks might be poised for a significant comeback in 2025 – offering patient investors a chance to capitalize on potential undervaluation. Thorough due diligence and careful consideration of individual risk tolerance are essential before investing in either company.

Disclaimer: This article is based solely on the information presented in the provided Fool.com link and does not constitute financial advice. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.