January 2022

Posted by Anton Murray Consulting on . Posted in 2022

Peloton Interactive is a high-profile company that is riding the highs and lows of CV19 trends that are changing, as consumers balance at-home versus in-gym exercise preferences. Famously, in a recent Sex and the City episode, Mr Big dropped dead after a Peloton class. With a case of art imitating life, the share price of Peloton dropped heavily after the episode went to air. So is Peloton changing our workout habits or will this ‘at-home-workout’ trend ride out of our lives just as quickly as it arrived?!

There is a broader ongoing debate that is reflective in the Peloton share price, as to how much life will ‘return to normal’ once the virus passes by for good. Some pundits predict Peloton’s value proposition is questionable, as folks will naturally want to return to gym classes and interact with others as soon as it’s safe to do so. Others argue that we are headed toward a medium-term ‘at-home workout preference’ where Peloton users will adjust their work-out routine permanently as they commit to working out at home for convenience and safety from this ongoing virus. In a way, Peloton’s share price is oscillating between these two view points. Exercise bikes have been widely available [for decades] at a fraction of the price with no ongoing subscription cost, so the product is not particularly new or innovative. Peloton’s advertising is compelling, and the revenue has been flowing over the past few years, but the high profile advertising is pricey, and recently Peloton has called in consultants McKinsey to help work toward profitability. This has resulted in drastic measures such as cutting staff and halting production in an attempt to adjust to a reduced demand for their ride-at-home bikes.

So will Peloton shine brightly then come crashing down as life returns back to normal and everyone heads back to their favourite gym and exercise class? Or are our exercise habits changing in a long-term way, with everyone with space dedicating a room to our at-home Peloton workout space? There is likely to be ongoing medium-term demand for Peloton and their competitors, although it appears there may be a slow fading of interest in at-home exercise subscription services as we seek a return to normality and in-person fitness interaction. At the moment the market’s view seems to be unfavourable toward Peloton and their high-profile attempt to encourage us to get on our bikes and stay at home.

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