UBS analyst Arpine Kocharyan says what the demand curve looks like for Peloton Interactive’s connected fitness business in a post Covid world “remains a key debate for investors” looking into 2022 and 2023. Based on an analysis of the total addressable market, defined as addressable households with minimum income of at least $75,000 per year in the U.S., U.K., Canada and Germany, exercising at least twice per week, Peloton would need to reach 7.7% penetration by the end of 2024 to meet a 38% annual growth expectation in Connected Fitness subscriptions, which is below the Street’s 42% annual growth expectation, Kocharyan tells investors in a research note. The analyst estimates Peloton’s penetration of the total addressable market at approximately 3.0% today, up from 1.5% in 2020 and 0.7% in 2019. Current consensus estimates assume more than tripling of the penetration rate by 2025, says Kocharyan. The analyst keeps a Sell rating on Peloton shares with a $74 price target. Kocharyan sees slower sales longer-term versus what the market is implying.