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Is Peloton a Buy Under $110?

Published 09/10/2021, 12:01 PM
Updated 09/10/2021, 01:30 PM
© Reuters.  Is Peloton a Buy Under $110?

© Reuters. Is Peloton a Buy Under $110?

Fitness-equipment maker Peloton Interactive’s (PTON) shares jumped in price recently after the company announced its new private-label apparel brand. However, the company’s plans to lower the price of its award-winning bike could diminish its profit margin. In addition, given that it is battling several lawsuits and investigations around treadmill safety issues, is it worth betting on the stock at its current price level? Read more to find out.Exercise equipment maker Peloton Interactive, Inc. (NASDAQ:PTON), which is based in New York City, is one of the world’s leading interactive fitness platforms. On September 9, the company announced the launch of its apparel brand, Peloton Apparel, marking its first private label collection. As a result, PTON’s shares jumped 9.8% in price on Thursday. However, while the connected fitness giant’s foray into the athletic apparel market has caught investors’ attention, the stock has tanked 13.5% in price over the past month and 35.7% year-to-date.

Closing yesterday’s trading session at $107.08, PTON is trading 37.4% below its 52-week high of $171.09.

The company’s decision to lower the price of its Peloton Bike could negatively impact its profitability in the near term. Furthermore, a bleak business outlook for the first quarter of its fiscal year 2022, and faltering demand for its fitness equipment amid the rapid COVID-19 vaccination roll out and re-opening of gyms, could cause its shares to suffer a downtrend in the coming months.

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