What happened Shares of Peloton Interactive (NASDAQ: PTON) gained 12.4% in value last month, according to data provided by S&P Global Market Intelligence. The stock was trading in a flat range for most of the month until a Goldman Sachs analyst raised the price target from $84 to $96, or 15% above the current quote of $83.33. The analyst believes investors are still underestimating Peloton's growth and profitability in both the short and long term. Image source: Peloton Interactive. So what The bullish call came after the stock had more than doubled year to date. The shares are currently up 209% on the year so far. Peloton now has a market capitalization of $24.8 billion, despite generating negative free cash flow and net income on a trailing 12-month basis. But the interactive fitness provider is growing rapidly and seeing significant progress in improving its profit margin. Eventually, this growth stock will have to rest before going any higher, but the analyst believes Peloton's current momentum justifies a higher stock price based on the sheer momentum in order volume right now. Last quarter, Peloton doubled its production output yet still had a backlog entering the fiscal fourth quarter. Now what Peloton earned its first profit on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis in the fiscal third quarter, and that may be the start of a trend. Peloton expects to report an adjusted EBITDA margin of 11.8% at the midpoint of the guidance range for the fiscal fourth quarter, which is rapid progress for a business that was reporting losses a few quarters ago. Peloton is calling for revenue to be between $500 million to $520 million, representing growth of 128% year over year at the midpoint. Connected fitness subscribers are expected to more than double to between 1.04 million to 1.05 million for fiscal 2020 (which ended in July). However, Goldman Sachs believes the company will beat those estimates with 1.09 million subscribers. We'll know more when the company reports fiscal fourth-quarter earnings on Sept. 10. 10 stocks we like better than Peloton InteractiveWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Peloton Interactive wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of August 1, 2020 John Ballard owns shares of Peloton Interactive. The Motley Fool owns shares of and recommends Peloton Interactive. The Motley Fool has a disclosure policy.Source