The COVID-19 pandemic sparked seismic shifts in the political, social, and economic arenas. Many
industries were severely hindered during the health crisis. However, there were companies that thrived
over the course of the pandemic. Peloton (NASDAQ:PTON) rose to prominence through its interactive
fitness products.
Shares of Peloton climbed to an all-time high in December 2020. The stock has steadily declined since
that peak. Its shares have plunged 73% in 2022 as of close on June 29. Peloton stock is down 92% year
over year.
Peloton released its first quarter fiscal 2022 earnings on May 10. Its stock suffered in the wake of the
report after it whiffed on its guidance. Revenue came in below projections at $964 million. Moreover,
the company expects to fall short of the subscriber growth it projected in the beginning of the fiscal
year.
Analysts have increasingly grown sour on Peloton, especially with the pandemic in the rear-view mirror.
The broader reopening in the developed world means that traditional gyms now pose a potentially
existential threat to Peloton’s young business. Meanwhile, soaring inflation has put major pressure on
consumers. These factors may seriously threaten Peloton’s prospects going forward.
The company is trading in favourable value territory compared to its industry peers at the time of this
writing. However, it does have a cash problem that it will need to address as profitability remains years
away. I’m not looking to jump on Peloton stock to kick off this summer.
