So can Peloton be fixed? If the stock continues to slide, there may be more pressure on the company to restructure further, or potentially even look for a buyer. Peloton did not respond to requests for comment.
Peloton shares plunged more than 75% in 2021 as the once red-hot stock (it soared nearly 400% in 2020) spun out of control. The company has gone from being a pandemic-era stay-at-home darling to one that is constantly having to put out PR fires.
Peloton has nearly 6 million subscribers, many of which are loyal. But make no mistake: This is still a high-end, niche company.
Peloton has also been hurt by the fact that more people have started to go back to the gym as the pandemic has worn on, especially now that millions of Americans are vaccinated and boosted for Covid-19.
Several insiders have been selling stock in the past year, too. Even though many of the stock sales are part of pre-arranged plans, the optics certainly aren’t great.
The company continues to lose money and it is expected to post more red ink in its next fiscal year as well.
The road ahead doesn’t look too promising
Peloton faces an uphill climb. Many analysts have soured on the firm. While 15 still have “buy” ratings on the stock, fourteen have a lukewarm “hold” on Peloton and two even have “sell” recommendations,
“Peloton is hoping that future sales benefit from lowering prices of its entry-level Bike to $1,495, which we think is a show-me story,” said CFRA analyst Kenneth Leon in a report on the stock last month. He has a “hold” on Peloton, calling it a “broken growth stock.”
One also has to wonder if Peloton might be better off as a private company or if a larger publicly traded firm could swoop in to take it over.
“The company most likely to acquire Blue Apron is Peloton. Peloton is facing the dilemma of how to grow its subscription revenue and the answer is to sell your customers more items,” said Citron in a bullish report Thursday about Blue Apron. (Not every Citron recommendation is a sell.)
“Peloton wants to be known as a health and wellness company, not a fitness business. Peloton sells a lifestyle and the two key components of a healthy lifestyle are diet and exercise,” Citron added.
Blue Apron had no comment on the Citron report.
