Peloton Interactive Inc. (NASDAQ: PTON) stock rallied briefly. Shares jumped in February but have collapsed since then. A promising movement disappeared as investors saw that the bicycle exercise company has not solved its problems. The shares are down 51% in the past year. (Customers are abandoning these 25 brands.)
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In its most recent quarter, revenue was $381 million. That was a recovery from the quarter before, but down by half from the same quarter a year ago. Peloton lost $335 million.
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The reasons for Peloton’s many problems have come since earnings. Alternatives are still abundant. Self magazine recently ran a story titled “Best Peloton Alternative Bikes, According to Cycling Instructors in 2023.” The gist of the story is that Peloton’s products are overpriced. While the Peloton bike used in the comparison cost nearly $1,500, many of the alternatives were priced below $500.
NBC made a similar comparison. Its story was headlined “12 popular exercise bikes in 2023 (that aren’t Peloton).” It was another brutal takedown of the high price of Peloton products.
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At the heart of any criticism of Peloton is that its brand no longer has much value with consumers, so consumers will not pay a premium. If Peloton drops its prices to $500, the company goes out of business.
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Peloton faces more than direct competition. People have returned to gyms as the dangers of COVID-19 have waned. Instead of riding a bike at home, they can ride in a social setting.
Those who thought Peloton had begun a recovery should think again.
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