Peloton (NASDAQ: PTON) CEOs have talked a good game since the exercise equipment company fell apart as the effects of the COVID-19 pandemic became less of a public worry. The stock traded at a magical $125 in mid-2021, when people were trapped in their homes and wanted the exercise experience they had in the gym. By October 2022, the stock dropped to $7. It was down to $4 shortly after that, and has not improved by much more than a dime. There are two primary reasons. People are back in gyms, and equipment that competes with Peloton is available on Amazon.com for $200. On Amazon, Peloton bikes run about $1,695.
Peloton does have a product that connects to devices it does not sell. It does have products that include an app. However, these largely defeat the purpose of selling what Peepon says is the best exercise equipment in the world. Each of the businesses Peloton shows in its earnings report is up a little, flat, or down.
The real story of Peloton’s recovery is that its total revenue in the most recently reported quarter fell 3% year over year to $657 million. The company had a loss of $39 million.
Peter Stern became CEO on January 1, 2025. He was supposed to be the next turnaround expert to fix the company. Over the last year, the share price speaks for itself.
Peloton’s problem is not new to Peloton, nor is it new to many other companies. It used to have products that people wanted more and more each year. The market changed. Less expensive competition was everywhere. Peloton management believes its products are better than those of its cheaper competitors. The exercise public is telling it otherwise. Investors need to decide if Stern is right or if the market for its equipment is. The stock says the market does not believe him.
From time to time, companies cannot be turned around. They are in too much trouble. That is, a word (or more), Peloton’s situation.
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