Peloton’s Collapse Continues
Peloton keeps rolling out new products and bold promises, but a brutal five-year stock chart raises one uncomfortable question: does the company have any moves left that customers actually want?
Peloton (NASDAQ: PTON) believes its future lies in expanding beyond its traditional products. It has said this several times before. The new plan needs to be a “walk-off home run.” The stock is down 20% this year. Over the last five years, it is down 95%.
At the center of the turnaround is the Foldable Peloton Tread Flex. It is the “most affordable” Peloton treadmill ever. That says a great deal about what Peloton can get for its traditional products, which were expensive. The treadmill can be folded. It is hard to say if that will bring new customers.
It is also hard to say what the company’s new Peloton Tread Vision does. It has movement-tracking cameras. It supports “rigorous training, recovery and every stage in between.” This, in turn, gives users insights that may be vague enough to drive a sale.
Finally, the Peloton Tread+ Vision. Of course, it has AI features, as do many products across many industries. AI features are fine as long as people believe they improve the experience over traditional ones. It also provides a full-body workout. And it only costs $6,695.
Peloton has a history of introducing new products, only to see them produce mediocre or worse sales. It has added subscriptions to its products. It has placed its products in hotels, on Amazon, and at Dick’s Sporting Goods. None of these strategies has worked.
Another problem is that most of what Peloton offers is included in gym memberships, which are much less expensive. Competing products do most of what Peloton products do, for far less money.
In the most recent quarter, Peloton’s revenue was flat at $607 million compared to the same period a year ago. Net income rose from $22 million to $62 million. The report was unbelievably complex.
The stock is down 8% in the last month.
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
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A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
