By
Steve Muchoki
April 19th, 2024
As gyms are closed, the demand for alternatives modes of working out has increased. And here comes Peloton that provides fitness solutions for at-home sports activities. Peloton (PTON) stock is expected to surge in the near future.
In the hard times of coronavirus spread, investors have to be very careful while deciding which stocks to buy. Some analysts believe that one of the most reliable companies to invest in is American exercise equipment and media firm Peloton. Yesterday, Peloton Interactive Inc (NASDAQ: PTON) stock fell 4.18% and closed at $26.54. But today in the pre-market, it is rising 0.94%. PTON stock is now at $26.80. However, analysts believe that this plunge is temporary and Peloton will show a ‘much stronger’ performance as soon as coronavirus ends.
Now, many stay at home because of business shutdowns. Gyms are closed as well. For example, gym owner and franchiser Planet Fitness shut down. 24 Hour Fitness, Gold’s Gym, Life Time gyms have also temporarily closed. Therefore, the demand for alternatives modes of working out has increased. And here comes Peloton that provides fitness solutions for at-home sports activities.
The host of Mad Money on CNBC Jim Cramer stated:
“I think Peloton is very interesting. I’ll tell you why: ’cause it is the ultimate stay-at-home stock to stay home and work out. I don’t know if we have a real bad recession people will still buy it, but at least it does have a good thesis.”
Currently, the major part if Peloton’s revenue comes from the sales of its cycling bike and treadmill that cost $2,245 and $4,295 accordingly. Besides, Peloton benefits from the increased number of subscriptions to its online classes like yoga, meditation, and strength training. In the nearest future, analysts also expect an increase in Peloton’s app membership. For $12.99 per month, subscribers can access Peloton’s content library without owning Peloton’s equipment.
More about Peloton (PTON)
Peloton (PTON) stock is a good investment for some other reasons.
Founded in 2012, Peloton uses technology and design to connect the world through fitness. The company empowers people to be the best version of themselves anywhere, anytime. According to the company, it uses a combination of technology, content and best-in-class instructors to empower its millions-strong community through fitness. In June 2019, Peloton confidentially filed with the Securities and Exchange Commission (SEC) for a proposed IPO. In September 2019, the company raised $1.16 billion via its IPO. It floated 40 million shares of class A common stock at $29 per share.
Over the last three years, Peloton has significantly grown. Its total global revenue has risen up from $219 million in the 2017 financial year to a guided revenue of $1.5 billion in the 2020 financial year. Besides, Peloton has expanded its business and developed its user base. In the first half of Peloton’s 2020 financial year, the number of connected fitness subscribers grew by 96% to 712,005 from 362,388 in the same period of 2019. As for the monthly churn, it had grown from 0.51% to 0.81%, a 30 basis point increase.
Over time, Peloton’s revenues and user base are expected to grow further. Therefore, Peloton stock might be ‘much stronger’ in the nearest future.