Whatâs Going On Here?Okay, Peloton in New York, letâs do this: the luxury exercise equipment-maker made its quarterly update count late on Wednesday, and its stock dug deep to climb 17% higher on Thursday. Great job, you smashed it! What Does This Mean?$2000 price tag or not, Pelotonâs workout bikes didnât seem too expensive for the higher-than-expected number of customers who bought them last quarter, which led to 66% higher revenue versus the same time last year. Likewise, Pelotonâs digital subscription revenue rose by 64% as would-be gym bunnies hunkered down in their rabbit holes, only popping their heads up to scout out fresh workout content. And in whatâs become a rare feat among recent earnings reports, the company even raised its revenue forecast for this quarter. Why Should I Care?For markets: Theyâre neck and neck!
Since the companyâs stock market debut last year, analysts have been debating whether Peloton would attract and keep enough customers to become a lasting business. And its latest update added fuel to both sidesâ fires: a raft of new customers suggested coronavirus mightâve accelerated the home workout trend, sure, but the sky-high percentage of monthly â rather than annual â subscriptions hinted customers might be poised to flock back to their gyms (tweet this). Still, the naysayers seem to be losing the argument for now: Pelotonâs stock was up 34% this year before Thursday.
For you personally: If itâs good enough for youâŠ
In a textbook example of how a brand can try to increase its customer appeal, Pelotonâs planning to broaden its product range with a rowing machine and a cheaper treadmill. The company might be hoping that if it turns you into a die-hard customer, youâll become an investor too. Warren Buffett, after all, reportedly invested in Coca-Cola because he liked the taste of the soft drink and figured others would too â making the business one he understood and, in turn, meeting one of his investment conditions. | 