Purchasing shares of Peloton stock can be a great way to invest in the American company that produces exercise equipment and media products. Its products include treadmills, stationary bicycles, and indoor rowers with touch screens. It also provides on-demand fitness classes.
Relative strength rating
Peloton Interactive’s (PTON) relative strength rating is slightly more than 70. It’s not the best stock in the world, but it is undoubtedly in the top 37% of all 250+ industries. Despite its recent drop, the company is still overvalued and has some significant challenges ahead.
The best stock in the world has an RS Rating of around 80. The number reflects the Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell). The RS score is one of the most critical factors used by Zacks to determine the direction of a stock’s price.
The most efficient way to gauge a stock’s relative strength is to measure it against other stores in the same industry. You can do this in an easy-to-use screener, such as Fintel, or with a custom-built charting solution.
Earnings Outlook
During Peloton’s frenzied year of growth in 2016, it was one of the most exciting fitness names. But now, the company struggles to find footing in a post-Covid economy.
The Peloton executive team has had to lay off thousands of workers, cut down retail stores, and restructure the business. Its current financials show a large gap between revenue and income. It is unable to reach breakeven by the end of the fiscal year.
Investors are concerned that the company will fall short of its growth targets. As a result, its EPS is expected to be harmful for the next three years.
The company plans to close 86 retail stores and cut 500 more jobs. Earlier this year, Peloton also increased its prices on fitness apps and equipment.
Price hikes on exercise equipment
During the Pandemic, Peloton gained a lot of popularity as consumers bought its in-home exercise bikes. But in the aftermath, the company struggled to stay competitive. To keep up with intense demand, the company tried to cut prices. Unfortunately, this resulted in lower profit margins.
The company scrambled to recoup lost profits. Then, in February, John Foley stepped down as the CEO of Peloton. Restoration Hardware executive Karen Boone will take his seat on the board.
The company has also been cutting prices on exercise equipment. But earlier this year, it decided to raise prices again.
The hikes were a response to intense competition. Peloton’s round comes from fitness companies like Fitbit and Jawbone and stay-at-home products like Netflix and Hulu. It also has to contend with copycats. In addition, its supply chain has become strained as it tries to manufacture in-house.
Partnership with Amazon
During the recent exercise equipment pandemic, Peloton was one of the top-performing companies. However, revenue growth has slowed down from its height. As a result, the company is trying to win back investors’ confidence by expanding its product line and decreasing its reliance on its website.
Peloton Interactive (NASDAQ:PTON) recently signed a deal with Amazon (AMZN). The two companies will sell exercise equipment, fitness accessories, and apparel on Amazon. In exchange, Peloton will get the main landing page on Amazon. This is an important move for the company.
According to Peloton executives, the new partnership will increase the company’s reach and allow the company to sell products to a more extensive consumer base. The partnership will also open the company’s offerings to other retail partners.
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