Peloton Interactive Inc.’s shares fell 11.2 Wednesday after Morgan Stanley said the connected fitness company’s web traffic had decelerated and could hinder growth.

Shares fell $1.29 to $10.20 on the day. The stock’s 52-week range is between $6.66 and $26.50.

Morgan Stanley reiterated its “In-Line” rating at a price target of $4.50.

Peloton’s web traffic fell 27 percent in the fiscal third quarter, ended March 31, from the same period a year ago, as the company struggled to build on the momentum it had in the previous quarter when it ran heavy holiday promotions, analysts led by Lauren Schenk wrote, citing Similarweb data.

Schenk also wrote that although web traffic remains above pre-COVID levels, the year-over-year declines on a two-year basis had continued to deteriorate, “failing to find the stability needed for a return to growth, in our view.”

With lifetime value to customer acquisition cost (LTV/CAC) sitting at 1.4 times last quarter, “we believe PTON is faced with a difficult choice: it can either pursue growth at structurally lower profitability or accept continued revenue declines in the medium-term but at more sustainable unit economics.”

The analyst added, “While neither of these scenarios is ideal, it is increasingly unclear where new, highly profitable demand could come from. Rental/RaaS, certified pre-owned, 3P distribution, and digital all could play a role, but we have not seen signs that any are gaining the level of traction needed to drive material revenue growth in the short to medium term.”

Schenk sees a “slight upside” for Peloton to beat its third-quarter expectations but believes the “material beat bulls were initially hoping for is unlikely” as conversion has eroded in recent quarters and churn is expected to be elevated in February and March following the seasonal pick-up in subscriber growth in January.

Schenk wrote that third-party partnerships with Amazon and Dick’s Sporting Goods could drive upside in the quarter, “although it is hard to measure.” She noted that a recent Amazon search showed only “100+” Peloton Bikes were sold in the prior week, and availability at Dick’s remained limited to select stores. She noted that gains via new third-party arrangements would have to offset the impact of closed showrooms.

Year-to-date, Peloton’s current showroom base decreased from 135 to 87.