Blog > Rambling Session - PTON (02/28/2024)

Rambling Session - PTON (02/28/2024)

Rambling Session - PTON (02/28/2024)

I will preface this article by saying: I AM NOT QUALIFIED TO SPEAK ON THIS TOPIC.

After not paying much attention for a few years, I have been keeping a closer eye on the stock market lately. I really haven’t paid much mind to individual stocks since the pandemic. A particular stock that saw incredible growth during the pandemic, and an epic downfall post pandemic is Peloton (PTON). 

This makes sense. When gyms closed down, of course Peloton soared and I think it is a great product - though, I don’t use ours, my wife loves it and uses it frequently. However, the business is pretty bad. They have not been profitable since the pandemic and their active user growth has stalled, and is actually trending down. As I type this PTON is trading at $4.70 vs the one time high of $171.09 in January of 2021. 

I have been watching PTON and have been very interested in taking a position in them, as this price point is attractive to me, as someone who sees and appreciates the product and what it offers. However, my drawback is, quite frankly, the business and no amount of personal affinity will change the way the business operates.

But to, be honest, I will probably take a chance on it and here’s why:

I think that Peloton should at least take a moment to envision themselves as a “Fitness Streaming” service. At this point, I think that the equipment sales are a nonfactor as they are non-consumables and they’ve already peaked there. The majority of their revenue comes from the $12.99/mo App Subscribers and the $44/mo All-Access Subscription. They’re the Netflix of the fitness space. I think Peloton’s next move should be what Netflix just did and offer a lower priced Subscription plan that has ads.

These ads can be short ads in the beginning or end of a workout, so as to not interfere part way into a workout. They can even be skippable after 5-10 seconds like on YouTube so they don’t slow you down when combining workouts. They would generate ad revenue on a platform that is inherently niched down and the perfect audience for supplement companies, apparel companies, health stores, etc. This is a no brainer for me and I would immediately take up, or increase a position in PTON.

The other thing that I think would be a big boost would be to enter into some type of partnership with a company like Planet Fitness for example. They bring in a handful of Peloton machines and bundle All-Access Subscriptions into the price of the Planet Fitness membership. This would generate more users and more subscriptions revenue. The only deterrent I saw with this would be having to log into your account on these machines each time you went to the gym, which wouldn’t be a big hassle unless you were utilizing them as part of a circuit. My quick fix - either QR Code, Bluetooth, or Tap technology. If you are logged in on your phone, you can be logged into one of these gym machines with a click of a button.

Anyway, like I said, I am not qualified for this type of talk, and I’m sure these ideas have been heard before. I didn’t do much research into this ahead of time, so forgive me if I am rehashing old thoughts.

What do you think of Peloton? The product, the company, its future, etc.

As for this morning’s smoke, I went with a Rojas Street Tacos Barbacoas Robusto

Take care,


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