Is It Time to Buy Amazon Stock Now It Has Partnered with Peloton?


Amazon (NASDAQ:AMZN) is the world’s largest e-commerce corporation. Its 2.7 billion monthly hits make it a no-brainer platform for brands looking to boost their online presence.

Peloton (NASDAQ:PTON) announced today that its products are now accessible on Amazon’s U.S. website. It’s the latest in a series of harsh actions by the at-home fitness equipment producer to restrict sales and reduce losses.

Peloton wins, but Amazon certainly wins more. Why?

Peloton is retooling for a post-pandemic future. Peloton did well during the pandemic. Gyms shuttered, people worked remotely, and society experienced lockdowns. A range of interactive at-home technology that brought workouts and classes into the home was a home run.

As immunizations loosened pandemic restrictions, Peloton’s sales declined. The company will announce its fiscal 2022 full-year financial results this week. It expects revenue of $3.5 billion, down from $4 billion in fiscal 2021.

The reduction in sales is accompanied by a 28% year-over-year drop in monthly exercises. Simply put, gyms are open, and people are utilizing Pelotons less.

Beginning in 2022, the corporation installed a new CEO to right the ship. So far, the company has laid off personnel, slashed costs, tried a subscription-based sales model for its equipment, and moved production to external manufacturers.

The Peloton will sell the Peloton Bike, Peloton Guide, accessories, and clothes on for the first time.

Amazon’s win with this partnership

Amazon (NASDAQ:AMZN) was reportedly interested in buying Peloton earlier this year. Amazon is no stranger to acquisitions, and Peloton would’ve been a minor one considering its $4 billion market value after a 92% collapse from its all-time high.

Amazon (NASDAQ:AMZN) can sell Peloton’s goods on its website and collect income without absorbing a business that has lost $1.8 billion in the last four quarters. Peloton has only $879 million in cash after paying $750 million in debt in May.

Peloton’s CFO said buyers look for 500,000 Peloton products every month on, highlighting the deal’s potential benefits. Whenever a consumer can’t find what they’re looking for on, it increases the possibility that they’ll click on another website, costing Amazon more than just that one potential sale.

When buyers find what they want, Amazon’s AI algorithms might push other things into their view and create more cash. These recommendation systems are responsible for 35% of Amazon’s online sales; thus, satisfying monthly search volume for Peloton items would benefit Amazon overall.

Buy Amazon stock

Amazon’s (NASDAQ:AMZN) second quarter of 2022 was robust but mixed. Its position in electric vehicle firm Rivian Automotive (RIVN 2.92%) caused a net loss because its shares fell dramatically.

Amazon’s (NASDAQ:AMZN) operational variety is highlighted. It shows investors the digital economy and drives innovation. Multiple revenue streams buffer Amazon from external shocks like high inflation, which is pressuring customers and Amazon’s e-commerce business. Amazon Web Services drove 33% year-over-year growth in the cloud segment.

Its relatively new advertising division has earned $33.9 billion in revenue over the last four quarters and remains an attractive possibility because of the company’s prized media assets, such as Thursday Night Football rights.

Amazon (NASDAQ:AMZN) is more than simply an e-commerce corporation; there are many reasons to own its shares.

Featured Image : Megapixl ©  Marcosdelmazo

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About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.