What Wall Street expects Tuesday

Analysts and investors are eager to get to know Peloton Chief Executive Officer Barry McCarthy and have him articulate his vision for the company’s future. He will have the opportunity to introduce himself to Wall Street on Tuesday.

The former Netflix and Spotify executive has been leading the connected fitness equipment maker for roughly three months since he assumed the role from the company’s co-founder, John Foley. He took over as a slowdown in equipment sales and rampant spending were weighing on Peloton’s profits.

Some of McCarthy’s efforts to bolster the company’s financials and regain investors’ confidence are already underway, as Peloton seeks new customers but also ways to make more money off of its current user base. The company recently slashed the prices of its equipment, including the Bike, Bike+ and Tread, in hopes of making the products more affordable for a bigger audience. On June 1, it plans to hike the fee for a monthly all-access subscription plan, to $44 from $39.

Under McCarthy, Peloton has also been testing a rental option in select U.S. markets, where users can pay a monthly fee of anywhere between $60 and $100 for a rented Bike or Bike+, along with access to its workout content library. It’s still unclear if this option could roll out nationwide.

“With a new CEO, no clear strategy yet, and the fundamental value proposition coming under question, there is a lot of uncertainty on what happens next with Peloton,” Bernstein analyst Aneesha Sherman wrote in a note to clients.

Peloton is expected to report Tuesday a fiscal third-quarter loss of 83 cents per share on revenue of $972.9 million, according to an analyst survey compiled by Refinitiv. That’s compared with a loss of 3 cents a share on revenue of $1.26 billion a year ago.

Here is what Wall Street will be watching for as Peloton reports its results.

McCarthy knows he must cut costs in order to keep the business afloat. The jury is still out on whether Peloton’s plans will go far enough.

Roughly three months ago, the New York-based company announced a massive overhaul of its cost structure that included axing about 2,800 jobs. Peloton also said it would wind down the development of Peloton Output Park, the $400 million factory that it was constructing in Ohio.

All in, Peloton’s plans would slash about $800 million in annual costs and reduce capital expenditures by roughly $150 million this year.

Activist Blackwells Capital has contended that those cuts won’t be enough. The firm, which in late January called on Peloton to fire Foley, continues to push for the connected fitness equipment maker to sell itself to a business such as Amazon, Google or Netflix.

MKM Partners managing director Rohit Kulkarni said he expects Peloton will have to revisit its cost structure this week. The company will likely need to make additional…