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Are the Wheels Falling Off for Peloton?

After a year of explosive growth, the company is beginning to slow down

25%: The percentage fall in Peloton’s share price year-to-date, not accounting for the further losses that occurred after the company’s recent Q4 report, which failed to meet expectations.

A treadmill runner typically struggles in the early minutes of the run, then kicks into gear, enjoying a sustained period of high-performance before hitting the wall and eventually coming to a stop. It seems this trajectory also applies to the trendiest of treadmill makers, Peloton. On August 26, the company shared its Q4 earnings for 2021, and the data showed a dramatic tail-off in growth compared to the previous year. The numbers show the company may have enjoyed its high-performance period and is now starting to feel the burn. The announcement spooked shareholders, causing shares to tumble by as much as 15% before rebounding to end the day 6% down. The outlook was bad enough that Peloton has lowered its expectations for Q1 of 2022.

While some of the company’s numbers are positive — its revenue of $936.9 million marginally beat expectations, and it ended the year with 2.33 million connected fitness subscribers, a 114% increase from a previous year — many of the other data…