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Shares of Peloton (PTON) - Get Free Report jumped more than 6% Wednesday following a bullish initiation from Baird analysts who don't see the company being profitable for another five years. 

The firm initiated coverage with an outperform rating and $28 price target, which represents a potential upside of 21% from the stock's closing price Tuesday of $23.21. The stock has dropped about 20% since its initial public offering two weeks ago. 

"Key satisfaction/engagement measures are very positive and we see a sizable potential market. While achieving GAAP profitability may prove difficult over the next ~5 years due to investments, PTON possesses substantial long-term sales/profit upside," Baird analyst Jonathan Komp said. 

On Tuesday, the company sued Echelon Fitness, claiming it infringed on its Peloton's patents.

"Echelon has unfairly stolen customers from Peloton and attracted funding from investors that has reportedly brought Echelon's total valuation to over $100 million," Peloton said in the lawsuit.

Peloton makes home fitness bicycles that feature interactive classes.  

Peloton was trading at $24.66 on Wednesday, up $6.25.