Spinning is still on trend, but with gyms rebounding, more exercise bicyclists may opt to do it there rather than in their homes.
As a result, Peloton may be spinning out of the investor spotlight.
Wedbush has downgraded the company’s stock from outperform to neutral, as interest in its home-fitness stationary bike—which surged during the COVID-19 pandemic—cools off. Analyst James Hardiman has also lowered the price target from $130 to $115.
With the worst of the pandemic possibly in the rearview mirror (or at least more out of mind as tens of millions of Americans are vaccinated and gyms around the country are back to full capacity), this new era “will require the company to generate its own momentum through savvy marketing and compelling new products, as consumers will not only have the full complement of in-person workout options again available to them, but also an unprecedented and evergrowing list of digital/at-home choices,” according to Wedbush, which expects Peloton’s growth going forward to normalize.
Peloton enjoyed hyper-attention during the pandemic when fitness buffs—and those dealing with the so-called “quarantine 15” weight gain—led to delays for bike delivery. The Peloton treadmill, which was introduced in 2018, was rebranded Tread+ in September, thought it was recalled in May after reports of one death and 70 injuries.
Wedbush also cites free digital-only trial subscriptions that began at the start of the pandemic along with the current nice weather—which will encourage exercisers to work out outdoors—as additional reasons for the downgrade.
Peloton, a four-time Fast Company Most Innovative Company, officially launched in Australia today. The company debuted on the Nasdaq in September 2019.
Shares were down more than 4% to $114.98 in late-morning trading on Wednesday. At the start of the pandemic in March 2020, shares were less than $20, and they peaked at more than $160 this past winter.