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Peloton (PTON) Stock Introduction
Peloton’s story began just over a decade ago, in January 2012. Their idea was simple. They were bringing studio cycling into your home and creating an online community of cyclists.
After releasing its initial bike, Peloton released a variety of other merchandise. More on that later. Following a successful Kickstarter campaign in 2012, Peloton released its prototype in 2013.
The idea of having your biking studio at home and being able to compete against friends and strangers quickly became appealing to many.
The competition aspect of the brand was a huge success. Many news outlets picked up the story of Peloton and joined the hype.
In September 2019, Peloton went public. The company was given a unicorn valuation due to its potential market size.
Since then, its growth exploded. Some attribute its growth to the pandemic. As we all know, working out in gyms has become increasingly difficult.
Many turned to the online platform to be able to exercise from home. Is the hype sustainable past the pandemic? Below are some key statistics highlighting Peloton’s future lookout.
Pelton Stock Stats
Peloton is available in the US, Canada, Germany, and the UK. What are Peloton stock stats? Let’s take a look.
Revenues began increasing with the pandemic’s start but have fallen since many restrictions were lifted. Revenues increased below expectations in the last quarter with the reintroduction of restrictions. The CEO and 2,800 other employees (20% of the workforce) were laid off following the last earnings. Are they a glimpse into Peloton’s future quarters?
Q2 2021: $1.064B
Q3 2021: $1.262B
Q4 2021: $936.9M
Q1 2022: 805.2M
Q2 2022: $1.13B
Profits have been nonexistent since they became public. Peloton spent a lot of money on celebrity appearances, renowned coaches for their platform, and music for their workouts. Partners include Jay-Z, Meghan Trainor, Beyonce, and instructors like Cody Rigsby (1M Instagram followers) and Robin Arzon (940K Instagram followers). Users could work out with their favorite artists and with their favorite trainers.
2019: ($246M)
2020: ($72)
2021: ($189M)
Subscribers Increasing
On a positive note, subscribers have steadily increased each quarter. Their retention rate is an outstanding 96%. Users have been loyal to Peloton, but since gyms reopened, many went back. Two-thirds of their users are between the ages of 25 and 44.
Many users might seek to split their workout time between a conventional gym and the Peloton platform. Human interactions remain important to a successful workout, but the online competition is unique. Peloton will have to decrease its spending to become profitable eventually. Its stock is under $30 after hitting over $160 in December 2020. Investors have fallen off the hype train since.
News of Amazon and Nike potentially buying Peloton drove the stock up 25% in the pre-market on Monday, February 7th. Peloton is an attractive buying opportunity for both giants and their existing customer base. Now may be an excellent time to get in the stock. Amazon and Nike can reduce costs and bundle the products below with their existing lines. Peloton can become the next Kindle for Amazon.
Bikes and Accessories
The Peloton Bike is connected to the internet, allowing users to compete with friends and strangers with a touchscreen. The cost of the basic Bike is $1,495. The Bike + has fully immersive technology and added features for cyclists seeking a more realistic home workout. The cost is $2,495, including delivery and setup.
It is possible to bundle the Bikes with accessories such as cycling shoes, light weights, dumbbells, a bike mat, a reversible workout mat, and a heart rate band for an additional cost. Peloton also offers financing on their items.
Users are generally very satisfied with the quality of the product, which explains the cost of the equipment. The Tread is also available with the same optional accessories as the Bike. The starting price is $2,495 + $350 in delivery and setup fees.
The price of a regular stationary bike and treadmill will be inferior. What sets Peloton apart from the rest is its unique competition model and the quality of its products.
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Membership
Membership is required to access all the classes (cycling, running, strength, yoga, stretching, and more). Like Netflix, users can create an individual profile for all family members.
Peloton offers a variety of apparel for its users. Items include leggings, shorts, hats, tank tops, and many more.
Peloton Stock Infrastructure
Peloton has 78 showrooms across the US and Canada and 12 in Germany and the UK. Customers can have a personalized walkthrough and a class trial. Many customers can immediately become sold on the Peloton idea.
Unfortunately, these showrooms also come with a big monthly bill. The last earnings call provided investors with some information about the future of these warehouses. The new CEO claimed many of them will close soon, saving hundreds of millions of dollars.
As we can see above, the company has a variety of revenue streams. They can capitalize on the loyalty of their members. Unfortunately, their expenses are too high, with production capacity and time issues.
If Amazon or Nike decide to save the company, they will be sure to reduce expenses and optimize the supply chain. They can also expand Peloton’s footprint globally. Four countries are not enough for a public company. To dominate the exercise from the home market, Peloton must expand.
Peloton Stock Alternatives
Peloton’s story and strategy may be one of a kind, but its business model is certainly not one of a kind.
Many gyms with an existing customer base can create their merchandise for a home workout.
We saw a lot of people looking into working out at home. Especially lately.
As a result, that could hurt gyms. But it’s great for companies like Peloton, who thrive off home workouts. Are there other companies who can compete with them?
Below are two public companies that can compete with Peloton.
Nautilus, Inc. (NYSE: NLS)
Nautilus has been around for over 30 years. They have physical locations in over 80 countries. Retailers such as Costco, Amazon, Sears, and others sell their products. The company also capitalized on home workouts during the pandemic. Nautilus owns household brands Bowflex, Schwinn, and others. Their affiliates have a wider range of equipment than Peloton (stationary bikes, treadmills, ellipticals, rowing machines, and home gyms) and online applications.
The pandemic certainly affected Nautilus’ physical locations. However, their online sales have been solid. 2020 was a record year in terms of revenue and net income. Their stock has been a roller coaster over the last three years. Fortunately, there is room for improvement. They have a solid customer base and quality equipment and are a global brand.
With the restrictions slowly disappearing once again and the home workout trends, Nautilus is well-positioned for the future. Their stock is under $5, short of its 52-week high of $30. Additionally, market capitalization is below 2020 revenues. This makes it a very attractive stock for investors.
Stock Sectors List
Planet Fitness Inc (NYSE: PLNT)
How did Peloton grow from a Kickstarter idea to a multi-billion dollar public company? Like for most companies, timing is essential and is a huge difference-maker. Can the company leave you?
Planet Fitness has been trending in the opposite direction recently.
Unlike Peloton and Nautilus, their stock is almost at an all-time high. What is the reason for their success?
First, Planet Fitness leases its stores. They have over 2000 locations across the US, Canada, Mexico, Panama, the Dominican Republic, and Australia.
However, only 80 gyms are corporately owned. The rest are all franchises.
Owners must pay $30,000 in initial fees and a 7% royalty on gross monthly and annual membership fees.
Membership Fees
Second, membership fees are among the lowest in the world. Revenues constantly increased from 2010 to 2019 but declined in 2020. Nevertheless, membership growth is back on track for consecutive quarters. Management wants to start charging for the mobile app, which has increased in popularity.
Lastly, Planet Fitness has sponsored “The Biggest Loser” since 2012. They provided their equipment, locations, and instructors for the show. They also partnered with 50 Cent for his energy drink. Planet Fitness also works closely with the “Boys and Girls Club of America.”
Their strategic partnerships increased their presence worldwide and boosted the credibility of their brand.
They decided not to invest in home gyms for the moment. Many athletes like the gym atmosphere, and the company is banking on that. Entering the home gym movement can be risky unless they are willing to acquire an existing brand.
Planet Fitness stock is currently sitting $10 shy of its all-time high of $99.60. Analysts are bullish on a post-pandemic recovery, and the stock is worth a closer look.
p to its hype and survive a post-pandemic world? Let’s take a look at this Peloton stock story.
Final Thoughts: Peloton Stock
To conclude, Peloton stock has been very successful in a COVID world. Once things go back to normal, gym rats might ditch the home workout. Peloton has to find a way to adapt to be able to survive. They are currently seeing offers from Nike and Amazon for a buyout. Alternatives to Peloton do exist but only lack the competition feature.
Personally, I prefer working out without a coach or a leaderboard and at a gym. If the pandemic ever ends, we will be able to see if others agree with my views.
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Frequently Asked Questions
Yes, Peloton stock trades on the Nasdaq Global Select Market under the ticker symbol PTON.
For Peloton's most up-to-date share price (PTON) stock, click here.
A Peloton All-Access Membership will pay back $44/month plus tax. This membership provides unlimited streaming of live and on-demand classes on the Peloton bike and access to the Peloton app. It's pretty good if you ask me. You can also go with the Peloton app-only membership for $12.99 monthly plus tax. With this membership, you can access thousands of on-demand classes on your web and Apple iOS/Android app devices.
You can buy two competitor stocks of Peloton which are Nautilus, Inc. (NYSE: NLS) and Planet Fitness Inc. (NYSE: PLNT).
The Vanguard Group, Inc. holds the largest ownership stake in Peloton, with approximately 7.4% of the shares outstanding.
