Interactive fitness platform provider Peloton Interactive’s (PTON) continued investments in digital content and product launches have helped it grow its subscription base significantly over the past year. However, now that more people are heading back to gyms, interest in at-home fitness equipment and programs appears to be waning. So, the question is, is the stock a wise investment bet now? Read on.Exercise equipment and fitness platform provider Peloton Interactive, Inc. (NASDAQ:PTON) is known for its connected fitness products, such as the Peloton Bike and the Peloton Treadmill, as well as on-demand fitness classes. With a loyal community of more than 5.4 million members, PTON’s stock was one of the top performers amid the pandemic last year.
Although robust investments in content and software features and strong connected-fitness-subscription membership growth have helped its stock gain 72.7% in price over the past year, the stock is down 23.2% over the past six months, and closed yesterday’s trading session at $120.93, 29.3% below its 52-week high of $171.09.
With people returning to gyms now that 70% of U.S. adults have had at least one shot of COVID-19 vaccine, the demand for at-home fitness equipment and services is expected to decline. This could be challenging for the home fitness operator’s business. Furthermore, PTON’s sky-high valuation and ongoing class-action lawsuits could create pessimistic sentiment toward the stock.