Why does PTON continue to fall?

Time:2021-12-30 Source: 855 views Trending Copy share

Peloton's ( PTON ) stock price continued to fall due to continued weakness in sales. As the economy gradually recovered, people were able to return to the gym one after another.

Home Fitness First shares Peloton ( PTON ) due to its networking exercise bike and a treadmill is known, you can say are more popular than any other company 19 COVID- impact. Peloton has benefited a lot from the pandemic, which forced the closure of gyms, restaurants, movie theaters and other places where people gather. As gyms closed and people were confined to their homes to slow the spread of COVID-19 , Peloton happened to have the right business at this time: it made a lot of money in a market where there is hardly any competition. Full. The price of Peloton 's basic treadmill, including delivery and assembly, is US$ 2,495 , while the price of the most basic exercise bike is US$ 1,495 . The pandemic has greatly boosted Peloton ’s sales, and revenue from this business doubled year-on-year in fiscal 2020 to $ 1.8 billion.

Peloton is disruptive and innovative because the company has transformed fitness obsessions into a subscription-based business model in a market with severely limited supply. The company not only sells fitness equipment, but also provides interactive fitness classes, which can be attended by paying a monthly subscription fee of $ 39 . Subscriptions also surged during the pandemic. By the end of 2020 , the total number of online fitness subscriptions was approximately 1.1 million, an increase of 9 times over the first quarter of 2018 .


However, as the economy gradually recovers and people are able to return to the gym one after another, Peloton 's business model may face some challenges in the near future. Previously, according to Raymond James ' analysis of Google search trends, Peloton lost a lot of popularity after experiencing a series of setbacks.

Historically, Google search trend data has a good correlation with Peloton 's sales performance . According to the latest analysis of our US stock investment website, search trend data shows that in the December quarter, demand for Peloton sales continued to be weak. Google Trends data showed the US search trends last year, 12 December when it quarter fell by 30% (9 month -31%) . Search volume in the UK decreased by 40% year-on-year (1% inSeptember) , and search volume in Germany decreased by 58% year-on-year (29% inSeptember) . Although Australia has a low base, it still rose sharply ( up 213% year-on-year ) . From a month-on-month perspective, US search trends show a quarter-on-quarter increase of about 10% (a year-on-year increase of 15% last year ) . Compared with last year’s significant growth, the quarterly performances of the United Kingdom and Germany have been flatter.

Analyst Aaron Kessler evaluated Peloton 's stock based on its "market performance ." He did not give a target price for Peloton , but believes that the fair value is $ 38 . Before the deadline, Peloton 's stock price was $ 34.45 .

To be sure, after a series of execution errors, Peloton 's stock price is struggling to enter the new year.

The stock price fell 18% in December due to negative news brought about by product placement in the restart of the new "Sex and the City" . One of the protagonists of the play, Mr. Big, had a heart attack at the end of the episode after taking a Peloton bicycle lesson. This unexpected ending intensified Wall Street's concerns about the company's bicycle demand during the holiday.

Earlier, Peloton 's share price 11 Yue 5 -day drop of more than 30% after the company said the company has 249 Wanming networking fitness user, broadly in line with analysts' expectations. However, the number of times users exercised on the platform showed a downward trend for the second consecutive quarter. Sales were far below analysts’ expectations, and the company’s reported losses also exceeded expectations.

Peloton also lowered its forecast for the entire fiscal year.

The company expects full-year sales to drop significantly from US$ 5.4 billion to US$ 4.4 billion to US$ 4.8 million. Peloton expects adjusted operating losses for the year between 425 million and 475 million U.S. dollars. The company originally expected an operating loss of US$ 325 million.

Since the beginning of this year, the company's share price has fallen by 76% .

However, one of the few on Wall Street are still optimistic about Peloton one analyst of Macquarie (Macquarie) analyst Paul Golding of Peloton valuation is 60--95 dollar.

Golding said that Peloton is seen as a story at this special point in time. This is a globally recognized luxury brand with a huge manufacturing, transportation and logistics framework. He thinks the market is discounting this.

PTON 's share price has great potential for revaluation. As the world emerges from the COVID-19 pandemic, it will be harder for Peloton to attract buyers to pay for its expensive fitness equipment.

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