Peloton stock was at $8.79 as of 11:02 AM EDT on Thursday.
Despite analysts’ expectations for better times ahead for the pioneer of linked fitness, Peloton Interactive (NASDAQ:PTON) stock is still reeling from the effects of the epidemic. Is now the right time to make a purchase?
Peloton Stock Changes
Peloton stock closed at $9.05 on Wednesday after trading at almost $160 per share in late 2020. The shares have fallen almost 70% so far this year and roughly 20% in the last 30 days. In contrast, the S&P 500 has decreased by 20% and 7%, respectively, throughout that time.
Peloton’s decline has been aided in part by unimpressive financial results; the manufacturer of fitness bikes announced a fiscal Q4 net loss of $1.24 billion in August and a fiscal Q3 net loss of $757 million in March. The revenue has also decreased, falling from $1.13 billion in the fiscal Q2 to $964 million in Q3 and $679 million in the Q4.
Despite this, many still view Peloton as a growth story, a pioneer, and an early leader in the developing leisure industry of linked exercise. Bulls also highlight prospects for expansion through apparel, accessory, and subscription sales in addition to Peloton’s extensive library of workout content.
The Friday Rally in Peloton Shares and Why It Occurred
On the other hand, bears have cautioned that the Peloton craze has likely peaked and that the company faces numerous difficulties in its quest to return to profitability, including rising costs, consequences of product recalls, and increased competition from recently reopened gyms and at-home fitness products.
Following the departure of Peloton co-founder John Foley, the firm announced in February that it has appointed former Netflix and Spotify CFO Barry McCarthy as its new CEO to help turn the business around. Since then, the company has been busy carrying out a reorganization plan that includes layoffs and terminating in-house manufacturing.
Peloton (NASDAQ:PTON) has also been making moves to broaden its marketing reach. The revelation that Peloton items will be sold through Amazon, a significant change for a firm that has previously relied on selling its products through its own website and stores, caused the stock to rise on August 24.
Peloton Stock Forecast
Peloton stock suffered the next day as the company issued a poor Q4 earnings report and an outlook that fell short of Street expectations, partly because of sluggish consumer demand. The company also disclosed that it was conducting a significant restructuring to address issues like excess inventory and supply chain challenges. Peloton stock also dropped on August 30 when the business announced it wouldn’t be able to submit its 10-Q on time owing to restructuring-related accounting concerns.
On September 12, after the firm revealed that co-founders John Foley and Hisao Kushi, as well as Peloton’s chief commercial officer, were departing the company, the stock fell once more. Kushi had been chief legal officer, while Foley had been executive chairman since resigning as CEO in February. The departures also sparked rumors that Foley might sell his stock after a “cooling off” period.
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