Peloton Interactive Inc. (PTON) is a retail manufacturer of fitness equipment. Its services include connected fitness subscriptions for access to live interactive workout platforms. PTON gained widespread popularity internationally since the onset of the pandemic, as the lockdown forced people to work out indoors…
As people have become accustomed to life under the new normal, the new trend of virtual workouts is expected to continue. In fact, even with the gradual reopening of gyms and other fitness centers in most regions, a recent survey conducted by TD Ameritrade revealed that 59% of people are unlikely to renew their gym membership post COVID. Peloton Interactive Inc. (PTON) witnessed a record surge in its subscription memberships this year, and currently has over 1.3 million paid subscribers.
PTON’s unique business model and first mover advantage allowed it to gain more than 245% year-to-date. On April 22nd, the company hit a record of 23,000 people streaming a single live workout class. This impressive performance combined with several other factors has helped PTON earn a “Strong Buy” rating in our proprietary rating system.
Here’s how our proprietary POWR Ratings system evaluates PTON:
Trade Grade: A
PTON is currently trading above its 50-day and 200-day moving averages of $76.75 and $46.83, respectively, indicating a golden cross uptrend. The stock has gained 71.8% in the past three months, reflecting a solid short-term bullishness.
PTON’s subscription services gained popularity amid the pandemic, as the lockdowns forced people to exercise at their homes. For the fiscal fourth quarter ended August 2020, PTON’s ending connected fitness subscriptions grew 113% year-over-year to over $1.09 million, while digital subscriptions grew 210% from the year-ago value to over 316,800. Connected fitness subscription workouts increased 333% year-over-year to 76.80 million. Total revenue increased 172% year-over-year to $607.10 million, while gross profit rose 188% from the same period last year to $288.80 million. PTON generated $89.10 million in net income this quarter, indicating a significant improvement over the net loss of $47.40 million reported during the same period last year.
PTON introduced a new product suite with Bike+ and treadmills on September 8th. Priced lower than the average market price, this product offers an effective at-home fitness experience to individuals worldwide. It also formed Peloton Health and Wellness Advisory Council, to study and analyze the physical, mental and emotional wellbeing of its members worldwide.
Buy & Hold Grade: A
In terms of proximity to 52-week high, which is a key factor that our Buy & Hold Grade takes into account, PTON is well-positioned. It is currently trading just 3.5% below its $52-week high of $102.83, which it hit on September 29th.
PTON has gained more than…
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