Peloton's terrible 2021 capped off with a fictional character dying - The Average Joe

    Peloton’s terrible 2021 capped off with a fictional character dying

    Victor Lei β€” Head of Research

    December 14, 2021


    December 14, 2021

    Last week, an airing of “Sex and the City” reboot (spoiler ALRT) sent Peloton (NASDAQ:PTON) down 5% before recovering its losses yesterday.

    What’s the big deal? Peloton, a pandemic winner of last year β€” turned loser this year β€” was the cause of death of fictional character Mr. Big from Sex and the City. In the first episode, Mr. Big was killed off after a 45-minute Peloton class.

    A statement from a cardiologist from PTON’s health and wellness advisory council pointed out:

    • Reason for death was from lifestyle choices (i.e. cocktails and cigars) β€” highlighted in a previous cardiac incident in a past season.
    • Riding his Peloton may have delayed the cardiac event.

    PTON hit back with a commercial featuring the actor of Mr. Big getting back up β€” “And just like that… he’s alive” β€” with a Ryan Reynolds voiceover, of course.

    What’s to blame? Just another hit for PTON β€” down 72% this year. Growth slowed significantly in the past two quarters β€” dropping to just 54% and 6% β€” from a COVID peak of 232%.

    In its recent earnings report, PTON reduced its sales forecast β€” having underestimated the impact of reopening.

    PTON even reported a massive $376M net loss β€” from a $69.3M profit a year ago β€” from doubling its ad spending and higher shipping costs from supply chain impacts.

    Looking forward: Investors are paying little attention to pandemic stocks. The Delta variant gave PTON a lift β€” but only temporarily as it kept moving down despite Omicron.

    • The bull case: Peloton is starting to look attractive with a valuation of under 3x price-to-sales multiple β€” and growth will eventually move back to a normal pace.
    • The bear case: Growth could remain low into 2022 as consumers opt to go out more β€” or hit the gym again β€” with supply chain issues persisting.

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