By
Tolu Ajiboye
September 28th, 2023
Yesterday, Peloton stock closed at $54.88 per share, which marked its new all-time highest closing price. In the early trading today, PTON shares were 3.5% up. The opening price today totaled $55.98, at the moment of writing, it makes up $54.83.
American exercise equipment maker Peloton Interactive Inc (NASDAQ: PTON) has been showing great performance on the stock market. During the coronavirus pandemic, the company took advantage of global quarantine and saw a 66% surge in sales. Peloton generated $524.6 million in total revenue for the fiscal third quarter that ended on March 31.
Besides, Peloton saw a surge in its membership. Connected Fitness Subscribers grew 94% to over 886,100, the number of paid Digital Subscribers rose by 64% to over 176,600. Currently, Peloton stock is approaching a new rally, its price is soaring.
Peloton Stock Hits New Record
As quarantine demand for sports equipment increased due to shifting consumer behavior, gym closures, and social contact avoidance, Peloton sales soared, which resulted in its stock’s surge.
Yesterday, Peloton stock closed at $54.88 per share, which marked its new all-time highest closing price. In the early trading today, PTON shares were 3.5% up. The opening price today totaled $55.98, at the moment of writing, it makes up $54.83.
This quarter, Peloton stock has already rallied more than 100%, allowing analysts to review their expectations. For example, on Monday, Stifel analyst Scott Devitt raised his price target on the stock to $62 from $55, while maintaining a ‘buy’ rating.
Investment bank and financial services company Cowen has also upgraded Peloton stock’s price target to a Street high of $70.
The opinion of Todd Gordon, managing director of Ascent Wealth Partners, coincides with Cowen. Gordon commented:
“This company was a first mover. It succeeded in the online fitness and social communities, unlike the other ones [with] hardware offerings like GoPro and Fitbit that I don’t think capitalized. They have a loyal customer base, high retention levels, and good margins from the subscription business.”
Further, Gordon added:
“Following that breakout above $35, they’re following a higher channel support, and I agree with Cowen — they don’t face technical resistance until the $70s.”
The $70 target means that Peloton stock is entering 28% rally from Tuesday’s close. It has already gained 210% up from March lows of just $19.51.
Risks and Challenges
Back in April, Peloton stock was on downgrade line, but analysts believed that this plunge was temporary and Peloton would show a ‘much stronger’ performance after the end of the coronavirus. And they were right. However, the current smooth running does not mean a glittering future for the company. There are always various risks and challenges. Among them are tough competition, mostly with SoulCycle, and the necessity to maintain customers’ loyalty.
Gina Sanchez, CEO of Chantico Global, said:
“It’s not just facing competition from SoulCycle. It’s is also facing competition from other bike makers like NordicTrack, Echelon, ProForm who are all forming their own studio offerings to help give a Peloton-like experience. They are a pioneer in this space but they’re also opening up the space for a lot of competitors.”
Anyway, Peloton’s potential is enormous. Hopefully, the company will live it up in the near future.