If you’ve been pedaling hard all year but haven’t gotten anywhere, there are at least two possible explanations. First, you can ride a Peloton (NASDAQ:PTON) bicycle. On the other hand, you may have some PTON stocks.
Undoubtedly, it was difficult to own PTON shares this year. Although the coronavirus epidemic has made home exercise more common than ever, the May tragedy continues to weigh on the company.
In late May, Peloton recalled his Peloton Tread + after the death of a 6-year-old boy who was pulled under a car. The US Consumer Product Safety Commission has warned customers not to use the racetrack. Clients reported 29 other injuries, and the crisis pushed the stock price to $ 90.
PTON shares have fallen more than 26% this year. Even after showing signs of reflection in the last quarter, Peloton has a long way to go.
Will the Peloton Tread + Cloud of Tragedy continue to hang on PTON shares? The company has already announced that it expects to lose $ 165 million in its fourth quarter. The fourth quarter և full-year profit is expected after the closing call on August 26.
Otherwise, is this an ideal time to return to the Peloton Fund? The trend of home training is likely to continue in the foreseeable future. Let’s take a closer look.
PTON shares at a glance
PTON shares lost 3 cents per share in the third quarter. That’s better than analysts predicting a loss of 12 cents a share. Revenue for the third quarter was also better than expected at $ 1.26 billion, beating analysts’ estimates by $ 1.1 billion.
Peloton expects to sell $ 915 million in the fourth quarter. That’s lower than analysts’ initial expectations of $ 1.12 billion in sales due to the track recall.
In addition to compensation, Peloton offered to waive membership fees for three months. The adjusted EBITDA for the fourth quarter will be reduced by about $ 16 million, the company said.
But on the other hand, Peloton says his sales cycle remains strong. The company said that the unit sales of its cycles in Q4 will be three times higher than two years ago.
The message here is that fourth-quarter earnings will not be as good as in the third quarter. Management’s need to talk about the long-term impact of track recall, whether it will have an impact on members.
Peloton mixes games and exercises
Fortunately for investors, there are several other exciting projects that provide long-term wind power for PTON funds.
Video games are very popular. And as Peloton has proven, home training is also popular. The company now combines those two aspirations.
Peloton recently announced a new game called Lanebreak to Peloton subscribers. Users will control the spinning wheel by pedaling their cycles with a belt. The game was compared to Rainbow Road Nintendo (OTCMKTS:NTDOY:) Popular: Mario Card: racing game.
According to: Gasoline:, users will be able to select the levels, the type of music that the game plays և the track duration. Lanebreak will only be available to Peloton subscribers և may be part of the basic subscription plan. Finally, Peloton may offer additional games as part of its premium membership.
More people than ever are working from home these days thanks to Covid-19. As a result, some companies are looking for ways to keep their workforce engaged and healthy.
To that end, Peloton announced the launch of a corporate health plan for companies looking for mental and physical health plans.
Through the program, participating companies can make their Peloton digital և all-access memberships available to their employees.
“We have heard from partners that they need flexible employee health solutions that can meet the evolving needs of the modern workforce,” said Cassidy Rose, CEO of Peloton Corporate Wellness. “Whether you are at home, on the road or in the office, you need to be able to access your scheduled physical or mental exercises – even work with a partner to motivate each other.”
This is a brilliant idea that will do a few things. First, it gives Peloton a different flow of income by working directly with companies rather than individuals. With one deal, Peloton can “train” his product “in front of hundreds of people at once.” His corporate partners will also endlessly support such offers. They want to see as many employees as possible with the company-sponsored activities.
Second, when employees leave their companies, they will be more likely to receive their own Peloton memberships if they find the lessons and programs enjoyable. In fact, JMP Securities analyst Ronald Ossey called corporate health programs “a service hub that could serve as another catalyst for new customer growth.”
Opportunities do not stop at companies. In September, United Health (NYSE:UNH:) Peloton fitness classes will be available to customers. It will add millions to the potential market of Peloton.
While the Peloton is declining year by year, it should be noted that PTON shares have risen about 40% since reaching a low in late May.
As the Delta version forces some cities to reinstate closed mask mandates, it is clear that working from home is very attractive. And Peloton is taking many steps, through fun games պ corporate partners, to capture a significant portion of the market in the foreseeable future.
At the time of publication, neither Louis Navelier nor the InvestorPlace Research Staff was responsible (directly or indirectly) for any of the securities listed in this article.
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