Peloton Share Values Decrease: Does the Company Have a Plan for Post-Pandemic Business?
Companies that support at-home health and lifestyle saw record profits during lockdowns and pandemic life. But as re-openings occur across the globe, some of those businesses are struggling, and stock prices reflect those challenges. Peloton, the home fitness company, is currently the most dramatic of these potential riches to rags stories.
On March 9, 2020, Peloton share prices hovered around $19.72. By December 21 of the same year, share prices were around $162.70 — a historic peak for the PTON. Those prices reflected robust sales driven by consumer desire to stay healthy at home. With gyms closed or requiring masks and many people simply fearful of the risks of public exercise, sales of Peloton's equipment and subscription training programs soared.
It's been mostly a downhill fall for PTON stock prices since that peak, though. Large dips in February 2021 and April 2021 brought the price down, and subsequent increases couldn't bring it back up to peak. And in October 2021, PTON experienced the worst drop in price after the company announced adjustments to its 2022 fiscal revenue forecast.
Peloton underestimated the impact of re-openings on sales and had to adjust its revenue forecast for the year down by around a billion dollars. It's telling that Planet Fitness stock is going up slightly as PTON is falling: People are starting to choose exercise outside of the home again.
Supply chain issues and excessive freight costs are also impacting Peloton's bottom line. The company also pointed to struggles in targeting online ads appropriately due to new privacy constraints — an obstacle many businesses are currently facing.
But Peloton isn't the only business (or stock) riding these same waves. Zoom, Netflix and DoorDash all experienced decreased value in stock as sales or subscription numbers slowed in the wake of re-openings. None of these were as dramatic as PTON's, though.
The big question is: Will Peloton survive post-pandemic life? Probably. The business existed before lockdowns and was even bordering on a household name. Will PTON value rise again to pandemic peaks? Barring future lockdowns, probably not outside of a focus shift for the company.