Peloton (Tkr: PTON) had an impressive run in 2020 with COVID-19 serving as a once-in-a-lifetime seeming catalyst - leading to a quintupling of the stock price. Consumers rode their hearts out to... well nowhere (because the bikes are stationary) and investors... welp, ended up nowhere too. Fundamentalists point to irrationally bullish forecasting and blown-out-of-the water valuations and thematic investors are simply left scratching their heads. Retail investors now look at their $1,000+ piece of equipment in their homes and cringe at the thought of the status of their PA accounts - double whammy. What the hell happened?
Will PTON get out of this slump? There is much speculation about what might bring the stock back but, even the street's biggest bulls have cut their price targets by 50% or more. Talks of a major overhaul of valuation methodology are particularly interesting. The stock has been covered predominately by tech analysts but, now some wonder - is this a media stock? Am I buying a piece of Alex Toussaint or a stationary bike (boy does that make me giddy). Personally, one of the most interesting "opportunities" I see for PTON is rooted in behavioral psychology as well as advertising. I believe PTON is not going anywhere. Like any diet that worked, consumers will always remember the time they bought and regularly used their bike or tread and how they looked and felt. Not only will these feel-good moments never leave their memories, but they are also tied to a particularly memorable and monumental time in the lives of its consumer base. PTON has found a small ~4ft x 3ft space in your home and in your heart and will not be going anywhere. If PTON hone its unique position within its marketing strategy, it will not stay stationary. PTON's opportunity is worth a lot more than the metal frame one mounts and I'd put my money where my mouth is on that.
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