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Peloton stock has dropped 84.68%, 32.27%, and 74.46% in the past year, YTD, and three months respectively.
Peloton Interactive Inc (NASDAQ: PTON) stock closed Thursday, January 20, 2022, trading at $24.22, down 23.93% from the day’s opening price. PTON shares, however, had regained approximately 9.17% during the extended trading period. According to documents obtained by CNBC, Peloton will temporarily halt bike production in 2022 following a sustained low demand in the global market.
Moreover, the company’s executives were involved in a share selling spree last year that amounted to approximately half a billion. The post-Covid market dynamics have played out against the at-home fitness platform for live and on-demand indoor cycling classes.
Following the dip, Peloton stock has dropped approximately 84.68%, 32.27%, and 74.46% in the past year, YTD, and three months respectively through Thursday, according to market data provided by MarketWatch.
Notably, the company’s market cap has dropped significantly in the past year, precisely from approximately $50 billion to $10.5 billion at the time of reporting. As the demand, wanes and competition around the globe increases, the company’s future growth prospects are on a knife’s edge.
The company had plans to expand its production capacity in the United States through a factory in Ohio, which was expected to be complete by next year. However, it is not clear if the half a billion-dollar investment will kick off as initially planned.
Peloton (PTON) Stock and the Market Outlook
Peloton has had issues with its treadmills with the reported fatality of a child. Among other technical challenges, the company faces a steep uphill to future recovery.
Chief Executive Officer John Foley said in a statement, “As we discussed last quarter, we are taking significant corrective actions to improve our profitability outlook and optimize our costs across the company. This includes gross margin improvements, moving to a more variable cost structure, and identifying reductions in our operating expenses as we build a more focused Peloton moving forward.”
With most gym facilities reopened around the world, at-home working out options are likely to decline in the coming quarters. Thereby the declining stock value for PTON shares.
The company lowered prices for most of its products including Bike, Bike+, and Tread. With the company expected to readjust prices to cover its expenses, the demand is expected to normalize in the near future.
Notably, Peloton reported 2.49 million connected fitness subscribers around the world. The company added approximately 161,000 net new members in the period ended September 30, 2021.
According to a survey conducted by MarketWatch, Peloton (PTON) stock received an average rating of Over from 31 ratings.