The investment firm affirmed its buy rating on Peloton shares.
The firm said sustained demand and above-average delivery wait times point to connected-subscriber growth exceeding Goldman's prior guidance estimates.
Goldman's note says the subscriber growth is not simply a pull-forward of potential subscribers due to Peloton's "relatively low penetration of the fitness market."
Instead, the New York company is "increasing the consumer value proposition for both Peloton products and the broader digital ecosystem."
Goldman now expects Peloton's revenue to rise 13.5% per year between 2020 and 2022 with its adjusted gross profits expected to climb 13.2% annually over the same time period.
Peloton shares at last check jumped 9.1% to $63.85.
Peloton is part of a group of e-commerce companies on which Goldman Sachs is more bullish as the coronavirus pandemic lockdown drags on in the U.S.
Monday's note says that Internet stocks have returned a positive 39% on a market-capitalization-weighted basis. That compares with flat returns from the S&P 500, which marks a "significant reversal in performance" since March 16, when internet stocks had returned -18%.
"Major outperformers during this period include Amazon, (AMZN) - Get Report Etsy, (ETSY) - Get Report Wayfair, (W) - Get Report and Peloton, each of which benefited from an acceleration in ecommerce demand amid shelter-in-place measures," Goldman's note said.
Last week, analysts at UBS downgraded Peloton to neutral from buy on valuation concerns, though the firm also raised its price target $58 from $48 on increased earnings estimates.
"We believe the stock is fairly valued at these levels, as investors are already pricing in a high degree of expectations for forward subscriber/revenue growth and [for a] path toward profitability in the coming years, UBS's note stated.