Peloton Is Deflating Fast and Heading for A Crash
The once-heralded company is skidding off the track as the world returns to normal
Peloton was a pandemic winner. When the population was forced inside, those not content with walking around the block on loop turned to home workouts, and the company hit big. Sales surged over 250%, and in January 2021, the stock price hit an all-time high of $170 a share. It seemed the company had everything; aspirational branding, social appeal, high-quality equipment and the growth to match.
But the rest of 2021 has proved to be an uphill struggle.
The company had to deal with its first major crisis when its treadmill was linked to accidents and a user’s death. The ensuing recall cost Peloton over $165 million — and far more in damage to its reputation. As the year ticked on and the world returned to ‘normal,’ Peloton faced its next problem; a dramatic drop in sales and a churn rate that nearly tripled to 0.80. The problems were compounded with poor Q3 earnings that caused shares to drop 15%, and, in what seemed like an admission of defeat, the company lowered the prices of its bikes. Unfortunately, even the price drop has failed to halt the decline. Jill Woodworth, Peloton’s Chief Financial Officer, noted on a recent earnings call that while conversion rates were high…
