Peloton — This is more than just a bike with an iPad
“It’s just a hardware company selling bikes.”
There are always misunderstood businesses in the market — and I think Peloton is one of them. Too many people see Peloton as a Covid-19 play — I did so too initially, brushing the investment off when it first gained traction from the Covid19 outbreak, but I gradually changed my stance as I dig deeper into the company.
The more I read up on the company, the more reasons I have to believe it has the ability to generate out sized returns in the years to come. In this article, I will share my views on why Peloton will be one of the most influential companies in the next decade.
Brief Introduction
Peloton is the largest interactive fitness platform in the world with a loyal community of more than 5.4 million Members (including digital app subscribers). The company pioneered connected, technology-enabled fitness, and the streaming of immersive, instructor-led boutique classes for its Members anytime, anywhere. It aims to give at-home hardware an in-studio feel by using technology to bring instructors, workouts, music, and a sense of community right to users’ screens.
To understand more about what Peloton does, watch this link below. While it’s a 2 year old video, it explains perfectly what Peloton is as a company.
The world’s greatest inventions were often born out of a need. This was the case for Peloton as well.
Peloton was founded by the current CEO, John Foley back in 2012. John Foley is an incredible leader and I will talk more about it under the Management section of my article.
How it all started
It was in 2011 when John first pitched the idea to his ex-colleague Cortese (co-founder, current COO) and Hisao Kushi (co-founder, Chief Legal Officer) that technology could make it possible for time-strapped people to get the full experience of working out in a high-end studio cycling class in the comfort of their own home.
John was in his early 40s and was married with 2 kids with a demanding job as an executive at Barnes and Noble in New York, where he faced difficulties trying to fit his busy schedules into the classes, who’d often run out of slots within a matter of minutes. Brands like SoulCycle and Barry were the popular choices back then. It was also difficult to find an instructor you’d like even if you get a class, and incredibly expensive to pay the per-class fee. These issues seems to also be a problem in Singapore, where I live in. I often see colleagues and friends lamenting that they’re unable to book their desired slots in time, and it not being the first time it has happened.
It was with these frustrations that led to John and his team to building the most customer-centric fitness company in the world. What if they could build a platform where users could workout anytime they wanted, with the choice of live classes or pre-recorded classes? Or even have a selection of instructors for them to choose from who they felt resonate with their style of workout? And the best part — without the need to wake up early, get stuck in a traffic jam, and camp in front of your phone screen trying to book slots only to get disappointed?
Peloton decided to shift the fitness industry from the commercial gym environments into the most convenient place on earth — the homes of their customers.
Management
I focus a lot on the quality of the management before deciding to invest in a company. While many investors love to look quantitatively (numbers) before qualitatively (management), I think the focus should be the other way round. It is the qualitative factors that results in the quantitative outcome. To put it simply, without Jeff Bezos’s and his team focus on customer experience, we will not have the Amazon we see today. Without Elon Musk’s tenacity and vision, Tesla will not have the success it sees today. For Peloton, it’s John Foley.
John Foley
I have watched all of the videos of John Foley that I could find online, and believe that he is a visionary CEO. A visionary CEO is able to look at things far out into the future, and ignore any short-term distractions that come his/her way. Even when nobody believes in them, they will push on and work towards their goal.
“We have such a fire in our belly right now, the same fire we had 8 years ago. There are still so many non believers in Peloton and where we are going … that pessimism fuels our fire and we’re excited to prove them wrong.” — John Foley
Back when Peloton first started, for four years straight, John pitched 3 times a day. In total, he pitched to almost 3,000 angel investors and 400 firms. Almost everyone said no to him. He eventually raised $10M from 100 angels, with 0 firms investing. Back then, the company’s financial situation was so rough that he had to clean Peloton office’s bathrooms himself for 3 straight years just because the company could not afford to hire office support staff.
John Foley mentioned that there were 2 key reasons why investors were not interested in his pitch:
1) Boutique fitness was a “blind sport” for Silicon Valley investors. “People only knew about mountain biking and road biking. They just didn’t see what was happening, and it was a blind spot for them.”
2) Peloton was unable to show any market data. Investors want to see evidence that the business model works before even investing in Peloton. However, as Peloton was the company that created this Connected Fitness market, there was no market data to back up his pitch. John Foley, in his own words (emphasis mine), said “They look for what’s called pattern recognition, and there wasn’t a pattern in what we were doing. It was frustrating, because I saw it clear as day.”
In many of John’s interviews, many of his interviewers could be seen asking him the same question, whether he thought of giving up when his pitches were not successful. He answered there were days he felt disappointed, but he pressed on because he was “sure as hell” and dogged that Peloton was going to have a place in the Fitness space.
A quick search on Glassdoor/Comparably shows that close to 80% recommends others to work in Peloton, and that 90% of the employees approves of the CEO:
One reason why I focus on employee reviews is that it shows how the company treats its employees, and whether there’s any internal problems within the firm that just can’t be seen by looking at the stock prices. Simply put, a company will not be able to create long-term value by treating their employees poorly. Happy employees tend to treat your customers better. Do a Google search for any of the FAANG stocks, and I’m pretty confident any of them will have pretty good Glassdoor reviews. Happy employees, happy customers.
John Foley is known to set high targets for himself and the firm, and has set out several ambitious goals outright:
1) He wants Peloton to have a NPS of 100 — a feat which no company has achieved so far. (More on NPS later on)
2) He aims to get Peloton to 100 million subscribers, at the moment it’s ~2 million (Connected Fitness), and he thinks his target audience is the 200 million gym-goers in the world, who’s paying hard earned money to access what he believes to be inferior fitness equipment in an inferior location. At first thought, this target seems crazy, but this is the same man who was once laughed at years ago when he told his friends and board members Peloton is going to be a $10 billion dollar company one day. Look who’s laughing now.
3) He wants Peloton to be the best company that one can work for in the world. [Bringing in Mariana Garavaglia, ex-Amazon executive with HR experience to scale Peloton, but at the same time keep the fun culture intact]
Another noteworthy point is that during the period where there was huge backlog of deliveries, Peloton decided to spend $100mil to fly their bikes over from their Taiwan factory, which is a lot more expensive than using boats.
The short-term investments in shipping our products are obviously, impacting our near-term profitability, but we must invest in our member experience, it’s our first priority. — CFO Jill Woodworth
This shows us how Peloton’s management team is long term oriented, something long term investors investors would like to see. When a company has a high ratio of LTV to customer acquisition costs (CAC), it makes perfect sense to invest as much as possible in acquiring new customers (more on this later).
How does Peloton make money?
Peloton makes money from their hardware sales and software subscriptions.
I’ll go through briefly the hardware sales component first, and the software sales later. Peloton mainly sells two types of fitness equipment — Bicycles and Treadmills.
Currently, there are 2 versions for both the bikes and treads, Peloton Bike and Bike+, Peloton Tread and Tread+. The main difference between the Bike and Bike+ is actually the screen size (Bike+ is bigger) and also the resistance feature. For Peloton Bike, the resistance feature is actually manually adjusted while for Peloton Bike+ there’s an auto adjust function based on the instructor’s cues.
Similar to Apple products, when the newer versions are released, the older versions will sell at a cheaper price. Currently, the Bike+ sells at $64/month for 36 months (or $2495), whereas the Tread sells at $111/month for 36 months (or $4,295). Both of these installments are for a 39 months duration.
To add on top of that exorbitant price tag, you’ll also need to pay $39/month subscription for the live and on-demand classes, where you’ll get to interact with the instructors live (min. 1 year after purchase). On first glance, the initial outlay seems extremely expensive.
Is the price justified?
But if you’re comparing it against the amount you’re paying for fitness gyms/ similar spinning classes, the amount you’re paying for the value you’re getting is actually considered VERY cheap! Depending on the number of times you cycle in a month, this amount can actually work out to be very cheap (~$4/workout), even more so if you have more than one family member who is willing to share the cost with you (You’re able to create multiple profiles just to track your progress/preferences, similar to Netflix).
Peloton understands that cost will always be a concern for potential customers, so they have also created a cost calculator for you on the website to see how much cost and time you’ll be saving if you ever decide to become their customer. I did up a simple comparison, assuming that if the current user and the partner were currently paying $400/month for their gym membership, working out 3 times a week, and buying a Peloton Bike+ under the 3 years installment plans.
For the $103 ($64/month for the bike and $39/month for the live classes), it is not even including the price of convenience (working at your own home) and comfort (there’s no one around to judge you if end up sweating buckets at home).
Given that you’re sharing the bike with 1 other person at home, this works out to be at least 3 times cheaper compared to the next alternative!!! (Classpass) And if you’re still using the bike after the 39 months, you’re only paying $40 per month compared to $300 which is the next cheapest alternative.
Long story short, for the value you’re getting, the price you’re paying is not expensive at all.
Is the business model sound/sustainable?
Before talking about the valuation, I would like to explore the unit economics of Peloton’s current business model.
For any firm that is profit-driven, the unit economics is very important. It is basically asking ourselves “Is there a path for this business to become profitable? Or is the business going to lose money forever?” Just like how credit card companies offer perks and incentives to get customers to sign up, companies will usually have to pay money in the form of Sales and Marketing expenses to attract customers to buy their products.
Firms will usually begin with a high Customer Acquisition Cost (CAC), which outweighs their Profit margin from their products/services. When that happens, it means that for every unit sold, the company is incurring losses. This is usually normal. Usually when a company has operating leverage, as the volume produced increases, the cost savings will usually fall to the bottom line. However if this trend is to be going on forever, it will not be sustainable for the company.
*I have used 63% for the subscription margin, which is close to Q3 2021’s subscription margin of 64.6%.
I have performed a quick calculation of Peloton’s unit economics using the numbers we have as of 9M 2021 and 2020. As we can see, the unit economics for Peloton is negative ($-282 and $-42) for both 2021 and 2020 (9M), such that with every acquisition of customer they’re actually not losing money as the Gross profit for the products sold is able to cover for those costs. Peloton also started out losing money for every customers acquired, but that has since changed from 2019.
This has not even taken into account the subscription revenues that will come in later on a monthly basis! You can also see that for every customer that signs up, the LTV is actually ~USD$3.7k, taking into account the subscription revenue for their average lifetime of usage. This gives it a LTV to CAC ratio of around 8.77! For every customer Peloton acquires, they’re able to make 8.77 times the cost it took to acquire them.
I think one of the favorite ways I have of looking at our business model and is clearly the lifetime value of our subscriber base. We had gone very negative CAC in the last several quarters is the fact that we are in a gross profit on our connected fitness products.
And we’re in a position even with these investments such that those gross profit offset — more than offset all of our customer acquisition costs on a fully loaded basis, which means thereafter, we have a very high margin, long lifetime value given the low churn of our subscriber base, the value of our subscribers. It just goes back to the rationale as to why we don’t care about gross profit margin percentage.
— Jill Woodworth, CFO Peloton (emphasis mine)
This actually shows us that the model that Peloton is currently using is extremely profitable and sustainable in the long run!
Competitors
Given the growing interest in connected fitness market, there has been a growing number of competitors emerging. Names like Nordic Track, Nautilus (Bowflex) and Echelon are commonly named as competitors of Peloton. However, I will not dive too deep into the bikes features, as I believe most of them has decent bikes, but what makes Peloton stand out from the rest is not the product itself, but the fitness experience that comes with it.
Below are some statistics I got from similarweb.com, which shows us exactly why Peloton is at the top of their game. A simple comparison between competitors (Titan Fitness is a strength equipment provider) shows that even when the rest of the competitors add up their number of monthly unique visitors, it cannot even beat the number of web visitors for Peloton. Bounce rate reflects the % of people who enters the page and exits immediately, so the lower the better. These statistics just tells us the brand prowess that Peloton has in the Connected fitness space, and how far ahead Peloton is in the Connected Fitness space.
I have also watched/read a ton of videos/reviews, and I believe that the Nordictrack S22i is the closest alternative to a Peloton bike there is. Even the above statistics reflect the same thing, Nordictrack is the 2nd placing in terms of website analytics. This user has given a very detailed review of the Peloton, NordicTrack and Echelon bikes which I felt was very indicative of what I saw among the various reviews. However, do take note that this is comparing Peloton Bike and not the Peloton Bike +.
What makes Nordictrack stands out from the other bikes is actually the scenic rides that they offer (Yes, some current users say iFit is still better even after the recent update Peloton had). The main concern that most people had with the Peloton bikes were just the premium cost that you have to pay. However, on a whole, just based on the entire experience that one can get, Peloton is still the top choice among many reviewers.
Whenever a big player like the Big Tech comes into the scene, everyone will start calling doomsday for the incumbent players, which is understandable, given the large cash pile that these players have to compete against the incumbents. Apple came into the Connected Fitness scene in Sep 2020 with their introduction of Apple Fitness+, priced at $9.99 per month. Just like how Teladoc’s and GoodRx’s shares fell right after the announcement that Amazon was getting into their space, Peloton shares fell initially, but recovered quickly after investors digested the news.
Apple Fitness+ has a catalogue of recorded exercise classes that you can do from an Apple TV, iPad or iPhone, so long as you own an Apple Watch. Given that the Apple ecosystem is part of many consumers’ lives, I thought this was a smart move by Apple to make the Apple Watch an even stickier product.
The workout options for Apple Fitness+ currently consist of high-intensity interval training (HIIT) along with strength training, yoga, dance, core, cycling, running and walking workouts on a treadmill, plus rowing and cool down options.
Class Selection: Given that Peloton has been around since 2012, it has the advantage in terms of thousands of workout classes, while Apple Fitness + has 200+. Peloton’s classes also shows difficulty ratings, whereas Fitness+ does not. In a way, this helps Peloton users by knowing what they’re getting into before selecting a workout.
Live Classes: Another key advantage of Peloton is that it hosts live classes everyday, and has a close knitted community among its Peloton users, which is something Fitness+ is not able to provide its users. Here’s a comment from a Peloton user who tried Fitness+:
Here is how I see it. Peloton is like grandma’s cookies. They are amazing! Perfectly baked and made from scratch. Their secret ingredient is love. Apple Fitness is like store bought cookies.
I have taken a few of the apple fitness classes as it is part of my Apple One subscription. They have a lot of work to do. My guess is they will improve over time. But they still have a lot of work to do. It will never be Peloton because Apple missed the main ingredient. Community.
Experience: What Fitness+ is lacking here is the fitness experience that users get. With a group of world class instructors that constantly motivates you while you’re working out live, Peloton just makes it easier for you to work out. With Peloton, you’ll also be able to see who else is taking the same class as you. Peloton App also offers broader compatibility for Android smartphone and tablet, which gives you more options for viewing classes on a big screen.
As of now, I do not think Apple Fitness+ app is posing much of a threat to Peloton, given the experience that Peloton is giving to its users. Given that fitness is not Apple’s main focus, while Peloton is entirely focused on fitness, I think Peloton still has an edge here.
Peloton makes you want to workout, while Apple Fitness+ requires a little more self-discipline on your part to get the most from it. We cannot rule out that Apple will not launch its own fitness hardware, but Apple will have to do more if it wants to eat into Peloton’s current user base/ exceed Peloton’s offerings.
“I used to say we want to be the Apple of fitness. I’ve stopped saying that. … We’re going to make Apple look small-time.”
– John Foley
Why I’m invested in Peloton
I will spend a bulk of the article explaining why I believe Peloton is best-in-class and high quality business.
- World Class Net Promoter Score -NPS (94)
The NPS, a.k.a. the Net Promoter score is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. It is used as a proxy for gauging the customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to the brand. Customers will be surveyed on whether they would recommend a company’s products or services to others, on a scale from 0 to 10. Of those surveyed, 0–6 are considered detractors, 7–8 are passives and 9 or 10 are promoters of the company.
The Net Promoter Score (NPS) is determined by subtracting the percentage of customers who are detractors from the percentage who are promoters. What is generated is a score between -100 and 100 called the Net Promoter Score. At one end of the spectrum, if when surveyed, all of the customers gave a score lower or equal to 6 (detractors), this would lead to an NPS of -100. On the other end of the spectrum, if all of the customers were answering the question with a 9 or 10 (promoters), then the total Net Promoter Score would be 100.
So what is considered a good NPS? Generally speaking, a Net Promoter Score that is below 0 would be an indication that your business has a lot of issues to address.
A score between 0 and 30 is considered good. If your NPS is higher than 30 that would indicate that your company is doing great and has far more happy customers than unhappy ones.An NPS over 70 means your customers love you and your company is generating a lot of word of mouth referrals.The higher your NPS is, the more likely it is that your customer referrals will convert into new leads, hence into more revenue for your company.
As of July 2020, Peloton’s NPS among North American bike owners was a whopping 94! This is definitely word-class standards in terms of NPS, as mentioned in this article by Forbes, NPS of 94 is unheard of in an industry where people quit their gym membership by February.
There is only one other company currently that has a higher NPS, and that is Tesla, which comes at no surprise, at 96! Other notable companies with high NPS are below :
. Netflix at 68
. Starbucks at 77
. Amazon at 62
. Airbnb at 74
The thing about companies with high NPS is that its users are often seen as “cultish”, and that also means that the users are more likely to recommend the products to their friends and their customer retention will be very high. Remember how Apple keeps releasing new products with minimal changes and their users still proceeds to buy the new models? That’s the Apple “cult” at play. No matter how much better features other phone models have, Apple users will tend to go back to buying Apple.
What else do users do to show that they love and can’t do without Peloton? They tattoo Peloton on their own body. This act of tattoo-ing actually reminds me of one other company : Harley -Davidson. People usually tattoo companies on themselves because of one reason and one reason only ; they identify themselves with the company’s values and worship them.
When you have such fervent following like the above, the company will need to spend very little to promote their companies ; the users themselves will promote the company through word-of-mouth.
2. The Community
What got started me in my scuttlebutt process was actually chancing on the Peloton Members Facebook group:
As I just wanted to find out what was all the craze about this bike, I was pleasantly surprised by what I saw inside the page. This isn’t just like any other FB pages you join, where the entire page goes dead after a few months. I have been inside the page for at least 10 months, and I still get posts notifications every single day.
This isn’t just any group; it’s a community of Peloton loyal followings. It is a place where you ask questions and get responses within minutes, where you ask fellow members which instructor would fit your personality, and where you share your ups- and downs. I’ve seen so many inspiring posts almost every other day of how Peloton has changed the lives of their users that it has led me to really believe that Peloton is a generational company. Peloton is not just a bike, it’s a community and a fitness experience. Below are two posts I took from the FB page (which I did not even try that hard to find…):
I’m starting to think that Peloton can actually sell themselves as a weight-loss program company after seeing so many posts of people with their transformations.
Usually, it is very common for people to leave feedback/reviews when they had an unpleasant experience, and very rarely do we see leaving people good reviews complimenting your products/services. It is just a nature of human beings ; we expect good standards of service and only leave reviews when expectations weren’t met.
However, what I saw on the page was entirely different. It was my first exposure to Peloton and I liked what I saw.
a. Users were egging each other on whenever they saw others struggling.
b. Users were giving feedback to each other on how to improve their posture.
c. Users were complimenting the last Peloton staff they came into contact with.
d. Users were inspiring others and telling them “If I can do it, so can you!”
e. Users were sharing with the rest how Peloton has made a change in their lives.
f. People were telling each other how and where to get their technical problems resolved.
Of course, there were negative comments, but mostly comments relating to delivery timings, which are totally understandable. Who can be patient enough to wait for a bike that takes more than 10 weeks to arrive? The management, in the last quarter, has since committed to spending $100million to fly over their bikes; and that has also reaped significant improvements in the delivery timings in the most recent quarter. (Peloton Bike waiting times has went down from 8–10 weeks to 1–3 weeks!)
A comment by Jill Woodworth, CFO of Peloton in their latest Q3 2021’s earnings call:
Last quarter, in order to reduce wait times for our products, we announced substantial incremental investments in expedited shipping of our products from Taiwan. Today, we’re pleased to report that we have made significant progress. Wait times for our original Bike are back to pre-pandemic levels of one to three weeks. Wait times for our Bike+ are also coming down and should get to the same place as Bike by the end of Q4.
With significant improvements in delivery delays, this also means more customers who first decided to not buy the Bike or Bike+ because of the delivery wait times would be willing to purchase the bike.
Of course, this Peloton “fad”, as people like to call it, had celebrities and popular athletes in it as well. World-wide names like Usain Bolt, Michael Phelps, Beyonce, Alicia Keys, David Beckham and Ellen Degeneres are fans of the bike and are not shy to share it with their followers. Did I forget to mention this? Even the President of US Joe Biden uses Peloton!
Whenever these celebrity riders shares with their followers that they’re using Peloton, this is instantly free marketing shared to millions of their followers. This is also known as the “Halo Effect”, where the tendency for positive impressions of one thing influence people’s opinions in another area.
In a way, when these celebrity riders profess their love for Peloton, they create a Halo Effect around the Peloton product. Potential consumers will buy the products because the risk of the product being bad is lower given that their celebrities have ‘vouched’ for the product and experience.
These word of mouth marketing is certainly going to help Peloton save lots of Sales & Marketing costs, which is also the cost paid to acquire new customers.
While doing my research, I also found out that there was tons of other FB groups:
3. Peloton’s secret(and most important) sauce : Their fitness instructors
I believe this is ultimately what makes Peloton special ; their fitness instructors. These are the people leading the classes everyday. They are also the face of the companies, and several of them has garnered their large group of followers on their social media.
There has been lots of new competitors entering into the foray of connected fitness, but none of which has the same world-class fitness instructors that Peloton have. This is also one of the reasons why I feel even with Connected Fitness being a very crowded space at the moment, Peloton will eventually come out on top.
Peloton, as of 16 May 2021, has 40 fitness instructors. That may seem like a lot at first, but if you think about it this company has been around for close to 10 years, and they’re serving close to 5.4 million users every day. That is actually very little! This shows how selective Peloton are in selecting who takes care of their members day in day out. Most of the instructors, once joining Peloton, has not left the company.
In one of the podcasts John Foley joined, he mentioned that back in 2013, Peloton first put out an ad on social media (cause it’s free), looking for the “top 10 fitness instructors in the world.”, Jenn Sherman was the first to reply “You found your person.” Till today, Jenn Sherman remains as one of Peloton’s instructors, even at the age of 52.
Only over at Peloton, a fitness instructor will have the opportunity to train thousands of people, one on one, live, everyday.
There’s a seven-year-old email that Jenn Sherman keeps on her phone, one she sent to her future employer requesting — demanding, actually — a job.
“I didn’t even know if they were hiring, but in the subject line, I said, ‘You need to hire me,’” she says. “I thought, ‘I’ll be ballsy, I’ll go for it.’”
It was a fateful move. Two days after hitting send, Sherman heard back from the email’s recipient, John Foley, founder and CEO of then-startup Peloton.
“He said, ‘There’s something about your email and the way you wrote it, and I got a great feeling from you,’” she says.
Peloton’s instructors are more than just people who teach everything from strength and cardio classes to yoga, meditation, cycling and more. Peloton users who have attended a class knows that those people leading always strive to bring elevated levels of human connection to the workouts. Their ways of coaching makes them feel more like friends than instructors.
Especially during times of COVID19, when the entire world was under lock down, the instructors became familiar faces to the members whose virtual presence made the isolation seem less lonely. The members feel especially special when their names are mentioned by the instructors, it goes to show that while you’re not in the same room, and when there’s thousands of people, the instructor still remembers your name!
“It’s easy to fake this… But both Alex and Ally [Love] remembered me when I was there from class one to class two,” he said. “Alex goes, ‘You’re the lawyer right?’ And that makes you feel good, like you’re not just a name on the screen. They really get it. They really walk the talk… If Peloton changed out their instructors commonly it wouldn’t be the same.”
Outside of classes, the fitness instructors are also social media influencers. with most of them garnering more than a few hundred thousand followers. They are also highly active on social media, where they would show their followers what they do outside of work, and they would answer questions from their followers, mostly Peloton members. This definitely fits into the fact that the instructors are not just instructors, they’re working as Brand Ambassadors for Peloton as well.
All of these goes to show how important the Fitness Instructors are to Peloton’s success. John Foley is very aware of their importance, and seems to know them personally very well based on how he mentions specific trainers and their personality during earning calls.
4. Vertically Integrated System
Peloton has a vertically integrated system.
From a presentation back in 2017 that I watched, Tom Cortese, COO of Peloton shares that the plan for Peloton to be in charge of the end-end consumer experience was a plan from the beginning. He shares that they wanted their own team to be the one doing the delivery, so that they can be in control of what happens from the moment the bike exits the warehouse.
They don’t want to leave the delivery in the hands of an outsourced provider, where customers can get a bad experience with delays in delivery or bad customer service. When the delivery personnel reaches the new Peloton member, they will then also assemble the bike and explain on the features of the bike before leaving.
Countries have gotten great at moving the small stuff, but nobody’s quite figured out the big stuff. — Tom Cortese, COO Peloton
Other than just being a means of delivery, their vans — Mercedez brand also displays the premium brand of Peloton and act as a form of advertisement.
Peloton also have modern retail storefronts at premium locations of the countries they’re operating in, to be used as a showroom for people to try on their high ticket products before they make any purchase. It also acts as a platform for them to sell their apparel and accessories line.
“We’re massive believers — as we release new products — of retail as a place to demonstrate. We do test rides and runs where consumers can come in and try the bike and tread. As we launch more new products, that will become more important,” Peloton President William Lynch
Peloton also have their own studios, in both New York and London where members can book live classes to meet their instructors in person (suspended due to Covid19), and where they record their live classes. [They reportedly spend $50m for the studios]
Peloton also designs their own software and hardware. They have a digital app where subscribers are able to use their own treadmills/bicycles, attach a screen in whatever way you can, and participate in their bootcamps/ live classes. John Foley refers to this as being “platform agnostic” with their content, where you’re able to workout with Peloton with any old hardware that you have.
They are currently also offering a free one month trial for their digital app. These subscription costs $12.99/month thereafter, but it is free for those who pays $39/month for the connected fitness subscription. The main difference between the two is that the digital app does not allow you to track your performance metrics and can only be signed in by one user profile.
This, to me, is a genius move by Peloton. While questioned by the interviewer on whether he’s afraid that people will end up not wanting to buy the treadmill/bicycle and just use their old equipment and the app, John replied that’s the scenario they want to happen.
Peloton wants to let people have a taste of how it feels like. Peloton is seeing that a large number of people who experience, who taste the content in digital first who ends up buying their hardware in the end. They see this as a “upgrade” in hardware. This is just like giving the Digital App subscribers an appetizer and knowing they’ll want to try out the “main course”. John firmly believes that the Peloton Bike is a dramatically better hardware platform. There is a flywheel effect through the use of digital app, explained below:
If we introduce our great instructors and our great music and our great community and our great content and software to members in a very low friction, $12 a month way and they see what we’re bringing and why the experiences on Peloton are different, that they’re eventually going to want a Peloton Bike or Peloton Tread. We are absolutely seeing that it continues to be one of our best lead gen channels. — John Foley in Q2 2021’s earnings call
To me, Peloton isn’t just a company selling bikes. They’re a lot of companies combined into one. I’m impressed with Peloton’s execution so far, given how they have to manage their entire platform.
The thing about vertically integrated businesses is that they take a lot of time to build. They take a lot of money to build. They’re very, very difficult to build, but if you can make a lot of mistakes, but if you’ve figured this business model out and you’ve gotten a careful control over the entire value chain of that customer experience, you can be a very good business for a long time. Because it’s very hard to replicate.
— Dennis Hong, Shawspring Partners
5. Innovator’s blood
a. Increasing TAM
Generational companies have always found ways to increase their Total Addressable Market (TAM). The TAM of a company is basically the total revenue opportunity available for a company. For companies that are much bigger than when they started (Amazon, Microsoft, Apple, etc), most of them started with a core product and started branching out to many other fields. For instance, Jeff Bezos started off selling books online, followed by Ecommerce, then the AWS space. You get the point.
This is also the case for Peloton. As mentioned above, Peloton started with only spinning classes. Through the past few years, they have expanded their offerings to a lot more. As a Peloton user/ Potential customer, this is exactly what I would want to see before investing into a Peloton product. The equipment is not just a once-off purchase, but you’ll be getting so much more value out of the entire eco-system. In a way, you can see Peloton as a one-stop hub to all your fitness needs.
To me, the TAM for Peloton is not just gym-goers/people who uses treadmills , it’s anyone in the world who would like to keep themselves fit in an engaging way.
Also, a comment from a Peloton user regarding the sudden removal of scenic rides which delighted me (emphasis is mine):
The rate at which they put out new content and product is so lighting fast and so in tune with customer desires I wouldn’t be surprised if something bigger and better comes around as it regards to scenic rides. This is like when everyone complained about the iPhone not having a home screen button anymore but now it’s an archaic relic of the past and no one thinks twice about it. Products evolve and change and improve and Peloton has only proven itself time and time again. Cut them some slack, you might be pleasantly surprised.
b. Precor Acquisition and expansion into International markets
Recently, Peloton also just closed an acquisition with Precor. Precor is a leading global manufacturer of commercial fitness equipment. It supplies to over 90 countries across the world, and hold patents over strength, elliptical , treadmill equipment and more.
The acquisition of Precor will allow Peloton to produce Peloton products here in the U.S. and fast track its ability to build a large domestic manufacturing footprint over time. Other than just bring Peloton’s deliveries up to speed, the acquisition will help Peloton significantly grow our commercial opportunity in hospitality, colleges and universities, corporate campuses, and multi-unit residential buildings, the markets which Precor serve.
“We sell bikes to consumers who trial in the hotel, and then they go home and purchase. In fact, I think the latest I saw was that for every bike we placed in a hotel, we sold at least 7 bikes to a consumer as a result of that”
Jill Woodworth, CFO Peloton at
JP Morgan 49th Annual Global TMC Conference on 25th May 2021
Can’t you see where Peloton is going with this acquisition?
Rather than just be in the homes of Peloton users, Peloton wants to open their commercial opportunity to other markets! This is like “following” Peloton users wherever they go. Imagine if you’re going for a vacation in Hawaii, or staying in campus to prepare for an upcoming examinations.
Having Peloton bikes in the gym will allow users to continue their exercise regime once they log into their user profile. I won’t be surprised at all if the availability of Peloton bikes becomes one of the criteria that Peloton users look out for when they decide to choose a hotel to stay in!
Furthermore, Peloton is always looking for more. Peloton is currently in 4 countries, mainly US, Canada, UK and Germany. The EMEA markets are still very new for Peloton, so I foresee we can still see market share expansion within the next few quarters. Most recently, Peloton announced on Mar 2021 their plans to expand in Australia as well.
Peloton user (Twitter ID @BobTreemore) has also diligently collated the countries where Peloton has made their IP filings. He is the Subject Matter Expert for Peloton and a very valuable following for me as he constantly tracks stuff relating to Peloton (delivery times, apparel related, acquisition related), please give him a follow if you’re invested in Peloton as well!
From here, we can see the potential markets that Peloton is looking to venture into. We can see the trademark and patent filings in these countries, and we can tell the global ambitions that Peloton has.
c. Partnerships with Beyonce + other artists
Peloton constantly finds ways to provide their members with an engaging and motivating experience. In Nov 2020, it partnered with Beyoncé to create a series of themed workouts as part of a Homecoming season celebration. Beyoncé was the most requested artist, requested by more than 3.6 million Peloton members.
Beyoncé’s Instagram profile alone has 180m followers (!!!!), currently ranked 9 among Instagram users with the most followers in the world. Can you just imagine the amount of influence she has?
I’ve been a Peloton member for several years, and I’m excited to partner with a company that helps people, young and old, be the best version of themselves. — Beyoncé
Needless to say, this collaboration would have definitely brought many new users on board the Peloton’s ecosystem. I am confident that Peloton would be able to continue bring on different artistes onto the Peloton platform, and continue to leave their members with a positive experience.
Recent bad news and possible warnings
There will always be bear arguments to every stock. I explore some of the more common ones that people love to bring up (other than the head and shoulders BS haha)
- Treadmill death and recall— Brand damage
Most recently, a child unfortunately died in a tragic accident with a Peloton Tread+. Peloton immediately contacted Consumer Product Safety Commission (CPSC) about the incident. The CPSC then issued a warning about Peloton’s Tread+, advising that users with young children or pets should stop using it immediately.
To date, CPSC is aware of 39 incidents including one death. CPSC staff believes the Peloton Tread+ poses serious risks to children for abrasions, fractures, and death. In light of multiple reports of children becoming entrapped, pinned, and pulled under the rear roller of the product, CPSC urges consumers with children at home to stop using the product immediately.
A video where a boy and a girl were playing and the boy got trapped under the Tread+ were also released by the CPSC. To be honest, my first thought when I watched the video was “Where were the parents when the accident happened?”
A quick search tells us that treadmill and fitness equipment accidents were very common. The CPSC told The Washington Post that there were 22,500 treadmill-related injuries treated in the US in 2019, and that it received reports of 17 deaths involving treadmills between 2018 and 2020. CPSC specifically targeting the Tread+ sounds totally ridiculous with me, actually.
Peloton, on the same day, also made a statement saying that it’s disappointed that despite collaborations with the CPSC, and with Tread+’s compliance with all safety regulations, CPSC has decided to make such a press release. It also made a full post, refuting on CPSC’s claim.
Three weeks later, John Foley then released a statement, apologizing for not cooperating with CPSC earlier, and allowing for a voluntary recall of all Tread and Tread+, which actually confused a lot of people. I actually know of investors who lost faith in the company just because of the fact that the company went back on its initial statement.
“We are a members-first organization, and that means for all of us at Peloton, the safety of our member community comes first. I want to be clear, though, Peloton made a mistake in our initial response to Consumer Product Safety Commission’s request that we recall our Tread+ product. We should have been more open to a productive dialogue with them from the outset.” — CEO, John Foley
While this wasn’t ideal, I know that every company will have its setbacks, just like what Peloton is facing now. The good thing here is that Treadmill makes up <5% of Peloton’s total revenue at the moment.
However, Peloton cannot afford to make any mistakes in terms of manufacturing/PR or their image can be ruined in the long run. For this Tread and Tread+ recall, Peloton expects the revenue impact will be approximately $165 million for the upcoming quarter.
Peloton is currently using this setback to show that they’re the industry leader in product safety, which I see as a positive. In the most recent earnings call, John Foley stated that there’ll be both hardware (tightening of screws and washes), and software(Tread Lock) changes incoming. Of course, the hardware improvements will still need to go through CPSC before Peloton is allowed to sell their treadmills again.
While there will definitely be some damage to the brand through this incident, but I believe Peloton and its team will come out stronger than ever from this.
2. Economy Reopening
People’s perception towards the company is that once the economy reopens, people will look forward to head back to gyms, and it could spell trouble for Peloton. While economy reopening would definitely affect Peloton to a certain extent, I’m not too worried. According to CEO John Foley, there has been 5 million treadmills sold annually, so it’s not like at-home fitness was a new thing, it was just that the products were not interactive enough.
With the pandemic, the fitness landscape has likely changed forever. Many have found novel, even superior, digitally connected ways to stay fit at home — and it’s beginning to look like we’ll never return to gyms again.
Nearly half of the 3 million jobs in U.S. health clubs disappeared last year along with more than half of the industry’s revenue. Several corporate chains has declared for bankruptcy protection. There also many other statistics that shows Connected Fitness will be here to stay.
A recent survey by consulting firm McKinsey & Co. found that 68% of those who started using an online fitness program during the pandemic said they planned to continue for the long term. The survey of 2,024 adults was conducted Nov. 9–13, 2020.
A recent study by The New Consumer found that 76% of people in the UK have tried working out at home during the pandemic, with 66% preferring it. The statistics were even higher for Millennials — 82% switched to home fitness, and 81% prefer it.
Customer churn is the percentage of clients lost during a specific period of time. For example, if you started the year with 100 clients, but ended it with 85, that’s a churn rate of 15%, because you lost 15% of your clients.
According to this research in 2019, customer churns among fitness studios sits at 25.1% and the numbers has been consistent since 2016. I believe with the pandemic, this number will have increased. A TD Ameritrade survey done recently found that 59% of Americans don’t plan to renew their gym memberships after the pandemic.
Within the same article, it mentions that an interesting study conducted that shows group fitness helps to drive lower customer churn rates for members. Sounds familiar? A higher and more consistent engagement has also been known to reduce customer churn.
Moving on to Peloton, what’s the churn rate?
Net adds were also helped by our low average net monthly connected fitness churn of 0.31%, the best we’ve seen in six years. Our record low churn is due in large part due to the efforts that we all make at Peloton day in, day out to drive engagement.
For Q4 '21, we expect average net monthly connected fitness churn under 0.85%. This is an increase from Q3 due to typical seasonality observed in the warmer months of the year. — Jill Woodworth, CFO Peloton
Even with the gyms reopening for the past quarter, Peloton has had a churn of 0.31% for the month, which is 3.72% annualized. (!!!!) Where are all those naysayers who have been saying that Peloton’s demand will die off once gym reopens? Even for Q4'21 (note that Peloton’s Y/E is in June), the projected churn is under 0.85%, 10.2% annualized. Compared to traditional fitness studios, this churn still seems very low!
Therefore, I still strongly believe that Peloton is set to thrive even when the economy fully reopens, and the one that should be worried are the traditional brick and motar gyms. If they fail to innovate, they’re the ones who suffer when that happens.
3. Possible Warnings
a) Instructors leaving (my biggest worry)
As I mentioned previously, the instructors are what keeps the subscribers going. More often than not, the subscribers forms an emotional attachment to their favorite instructors, so if any of the popular instructors (e.g. Cody Rigsby, Ally Tunde) were to leave, I believe they will bring their followers with them as well. However, from the interviews I listened, John Foley is very aware of this and the importance of their world-class instructors and are doing every means they can to retain them.
If there is any hint of instructors starting to be poached/ leaving because of unhappiness from Peloton, I would be very worried and would want to find out the reasons why. Peloton’s success is driven mainly by community engagement, and the human aspect is especially vital.
b) Drop/Stagnant Subscriber growth
A key metric to look out for will be Peloton’s Connected Fitness/ Digital App subscriber growth. Given the latest earnings, Q3 ending Connected Fitness Subscriptions grew 135% to over 2.08 million and paid Digital Subscriptions grew 404% to approximately 891,000; total Members grew to over 5.4 million.
This shows that Peloton is definitely still in hyper-growth mode, but if there’s any signs that subscribers are tapering off very quickly/stagnant subscriber numbers, I would be very worried as well. This shows that the company is slowing down, which will make me doubt on the CEO’s goal of hitting 100 million users.
c) Drop in CF subscription workouts and average workout per subscription, churn rates
Per Q3 2021 earnings call, Q3 Connected Fitness Subscription Workouts grew 239% to over 149.5 million, averaging 26.0 Monthly Workouts per Connected Fitness Subscription, versus 17.7 in the year-ago period.
These figures are unprecedented! The graph on the right just shows how much people are riding with Peloton on a monthly basis. 26 workouts per month just means the user is using the bike almost every single day in the month! Granted, there’s probably more than one profile per user, even then 26 is a lot.
While the economy has reopened, these figures don’t seem to be going down, instead they’re going in the opposite direction.
As mentioned above, if churn rates were to start going above ~1% (never before), or if the numbers of average workout drops drastically from current levels(below 15), I’ll definitely be concerned. This implies one thing — the subscribers are not getting the engagement they were previously getting and the company is losing touch. As of now, all these metrics look outstanding for the recent quarters.
These are the few things that I look out for as an investor. If these continues to be in shape, I believe the rest are just noise and a long term investor should just sit tight and wait for Peloton to execute its vision of 100 million subscribers.
d) Deteriorating customer service
For a consumer product firm like Peloton, customer service is pivotal in ensuring that your customer will act as your brand ambassador and sell your product/services after they’ve found value in using your products. Therefore, if customer service standards from Peloton were to fall off a cliff because of expansion plans, it will be something to be aware of. It will be close to impossible to make all customers happy, but I believe Peloton should seek to under-promise and over-deliver. Below I’m sharing a screenshot of an issue that a Peloton user is facing:
There isn’t much negative feedback on the FB group itself, majority of them are positive reviews. However, I would not want to take users’ loyalty for granted. Given that the user above has waited for at least 1 month, there should at least be a better response given from the agent attending to her queries. (update: The issue has been solved 2 days after this post was made)
I have also seen cases where the customer’s bike delivery were pushed back but no heads-up were given to the customer and the customer were left waiting, only to know that the delivery would be delayed till 2 weeks later.
I think what customers are looking for are actually proper communication from the company; they would obviously not be happy about the potential delay, but I believe they’ll understand if proper communication was made few days before the delivery.
Peloton moving forward / Possible Opportunities
a) Peloton Treadmill re-launch & expansion plans
Treadmill sales remain the №1 selling piece of fitness equipment in homes globally from a units perspective, hence it will be vital that Peloton will be able to get the approval from CPSC as soon as possible. According to the CFO in the JP Morgan Conference,
“ The Treadmill launch presents to us a massive market, not only because we know Tread-oriented boutique fitness outnumbers cycling fitness by a factor of 10, and it’s the most common product that people purchase for their homes.
-CFO Peloton, Jill Woodworth at the JP Morgan Conference
Per Q3'21 earnings call, management has said that they expect Tread (mass market Tread) to resume hopefully, in July’21. The tread was originally scheduled for May 27 launch in the U.S. The Tread has been well received in countries like U.K. and Canada, with a NPS of 85 by the treadmill owners, and the company is confident that the launch this time round in the U.S will be very successful as well.
The premium treadmill, which is Tread+, is the one which Peloton has been selling in the States for a couple of years, is the one that needs a few fixes before they can resume selling in the U.S.
Back in February 2021, Peloton announced plans to raise $1 billion in cash in convertible senior notes, which would be due in 2026 @ 0% interest. Back then nobody knew what they were raising so much cash for, especially when their balance sheet had very low debt and high cash.
A week ago (May 24th), the company finally announces their plan for the usage of the $1billion. Peloton equipment has always been built in Taiwan facilities, and Peloton Output Park (POP), expected in 2023, would be the first U.S factory in the U.S. They are planning to spend up to USD $400million for this.
Peloton Output Park is expected to sit on over 200 acres and have more than one million square feet of manufacturing, office, and amenities space, making it one of the largest connected fitness manufacturing plants in the world. The facility will be built from the ground up in the center of Troy Township and house the latest in industrial technology and automation to make products more efficiently and to ensure quality unit assembly. On campus, Peloton plans to incorporate renewable energy sources to power its operations.
The POP will be used to allow anyone to tour the factory and will have on-site showroom. Customers will also have the option to check-out Peloton products first-hand.
To me, this speaks of the confidence that the management team have of their demand for the years ahead.
b) Peloton Meals/ Peloton Nutrition
I’m sure you’ve heard the saying “you cannot out exercise/run a bad diet” and it’s true. It may take only minutes to consume hundreds of calories that took you hours to burn off.
A potential opportunity for Peloton can be in the Nutrition industry. Instead of just selling fitness equipment, why not include nutrition in the package as well? Peloton can do this in two ways:
- Selling in-house made nutrition products/ partnering with famous brands like Optimum Nutrition and getting a cut of whatever they sell within the Peloton platform.
- Encouraging Peloton members to eat healthily by getting their instructors to hold cooking/meal prep classes to show the members the food they cook and eat on a daily basis (they’re already doing this on their Instagrams!) I’m very sure the members would be interested in knowing what their instructors are eating to get the body that they have. [Pre-made meals opportunity]
c) New Products Pipeline
Peloton has come very far from their initial product of just the Peloton Bike. The company has also been very vocal about their plans to expand their product lines. The company has suggested that a connected rowing machine and strength training device are “good guesses” as to what the company is developing. With Precor acquisition, I think this helps the company introduce these products at a faster rate as well.
Recently, Peloton acquired 3 different companies (Aiqudo Inc, Atlas Wearables Inc and Otari) , adding expertise in wearable devices, AI, digital voice assistants and interactive workout mats.
Aiqudo built an AI-powered digital voice assistant that let developers add voice actions to apps and devices. Atlas Wearables made fitness-oriented smartwatches that guide users through workouts and gauge performance, while Otari created a interactive workout mat with its own screen.
Right off the bat, there’s sources saying that Peloton is testing out a new product called “Tiger”.
The handheld gadget, about the size of an old Sony Walkman, can be attached to a TV or computer and provides instant feedback on customers’ workouts, said a source close to the company.
It was not clear what sort of workouts Peloton would be offering, but The Tiger is equipped with software that will assess customers’ form and movements.
It’ll be interesting to see what other new products are in line for Peloton for FY22!
Valuation
Peloton’s share price can’t seem to catch a break. Firstly, we had the vaccine news which plummeted the stock as people think that the bikes’ demand will disappear into thin air. Next, we had the interest rates rising which killed growth stocks. Lately, we had the treadmill recall which resulted in a bigger fall.
Currently, Peloton’s share price has fallen 34% from their 52 weeks high, as show below:
On first look, it seems like the company just missed earnings big time. But for the past 7 quarters, Peloton has beaten analysts’ estimates by ALOT in both earnings and revenue, which shows us 1 thing: Peloton tends to be conservative in their guidance, which I see as a good thing. I love it when companies under-promise and over-deliver.
Treadmill sales accounts for <5% of Peloton’s revenue at the moment, but the share price crashed >20% because of the treadmill recall? Whenever there’s a disconnect between the share price and the underlying business, it usually presents the investors a good opportunity to buy the business at a cheaper price.
“The best thing that happens to us is when a great company gets into temporary trouble…We want to buy them when they’re on the operating table.”
— Warren Buffet
Valuation of a company is more of an art than science. Even the smallest changes in assumptions can lead you to a very different outcome of the company’s intrinsic value. Initially, I did up a rough calculation of its valuation, however I end up deciding to scrap that off given that there’s too many factors that will affect the valuation such as the future demand and subscriber growth of Peloton. Even a slight tightening from the Fed will kill growth stocks again like what we saw last month.
I know what I don’t know and I’m highly certain that my estimates would end up being very different from the actual. You can take estimates from different analysts and I bet that they’ll be very far off 3 years down the road. Instead, I’ll explain why I believe Peloton is not expensive at its current price.
For the past 6 years running, Peloton has been growing at least 100% for revenue every year, and is definitely going to grow 100% again this year! Peloton has guided for $4B revenue for FY 2021, which is around 120% growth! This estimates is actually down from the previous $4.08B provided by the firm in Q2 2021, but given that $165m is the costs estimated for the recall, but if the treadmill recall didn’t happen, it would mean that Peloton could have raised revenue guidance by $85mil for FY 2021!
I have no idea how many companies are there in the world that can grow their revenue at 100% for 7 years, but I’m sure there aren’t many.
Naysayers will definitely say that Peloton is a fad, but this company has been around since 2012, and has been growing at least 100% since 2015! Covid19 definitely did help compound the increase in demands driven by the stay-home-orders, but to John Foley, that is just “accelerating the inevitable.”.
Of course, I don’t expect Peloton to continue growing 100% every single year as there is not sustainable, but I believe Peloton is going to be in hyper-growth mode (at least 50% growth) for the next 3–5 years, given that they will be expanding into new countries and increasing their TAM by releasing new products (as mentioned above).
In the long run, I see Peloton becoming more like a SaaS company. Currently people value them as a hardware company, but when the subscriber base grows much larger 3–5 years later, this subscription margins is going to be huge. Peloton’s hardware sale is just used to build their base for the subscription business.
As of now, Peloton’s last 3 months subscription revenue is already at 155mil, and if we extrapolate that to the next 12 months, it means we’re already at 620mil annually in terms of subscription revenue.
*Peloton’s Connected Fitness GM dropped by 5% mainly due to increase in delivery cost from flying the bikes over from Taiwan.
Whether we’re looking at Forward EV/Revenues or Forward PS ratios, Peloton is still trading at less than 10, which to me seems extremely cheap if anything for a company that has grown 100% for so many years. If you compare this to companies like Datadog (28.8x)and Cloudfare(37.3x) (which I also own), you can see that Peloton is actually not priced that high!
I know people will definitely say that those companies’ TAM is larger, different kinds of business, but business profits are profits, and it’s a fact that this Peloton business model is going to be extremely profitable in the long run once the subscriber base doubles or triples from here. With every million new subscribers, we’re looking at a extra gross profit of around USD 295million annually! (1mil*$39/month*12months*63%)! And this doesn’t even include the profits that the company gets from their hardware sales.
We’ve barely scratched the surface for Peloton’s global expansion plans and additional hardware products that are yet to be released, so I can still foresee multiple expansions from here.
Final Thoughts
I believe that the Covid19 pandemic has brought forward many years of change in digital transformation and technology.
Lots of consumers flocked towards E-commerce channels to buy products, some even for the first time in their life, and this trend doesn’t seem to be going back soon. The older generation who has never used cashless payments before had to embrace paying using cashless methods. People who has never tried telemedicine platforms are using it for their first time. People who used to conduct live seminars now understands that they can save thousands of dollars in room bookings and teach their classes over Zoom where there’s unlimited space and a lot of cost/time savings.
Personally, I have never used food delivery platforms much before the pandemic. Currently, even after the pandemic has gotten better, I find myself ordering food more often using food delivery platforms. The pandemic in a sense, has made us realized there’s more efficient ways of getting the product/services that we want.
Peloton has changed the way people workout and I believe they’ll be at the forefront of the Connected Fitness industry for many years to come.
Disclosure : I am long PTON. This is not investment advice. I am not a registered investment adviser. Please perform your own due diligence before buying any shares of PTON.
