Peloton investors were in for a rude awakening on Thursday.
In fiscal fourth quarter of 2019 — just two years ago — Peloton had 511,000 connected fitness subscribers. Now, the company boasts 2.33 million. These subscribers shell out $39 per month to access Peloton's digital workout content.Nasdaq 100
Anmuth holds a price target of $138 on Peloton shares. He still expects international expansion and future product launches, including a rumored rowing machine, will help to fuel growth. "Over the past year and a half, [Peloton] hasn't really had to pull any levers," Wedbush analyst James Hardiman said in an interview on CNBC's "Tech Check" Friday. "And now, for them to continue to fuel this growth story ... they are going to have to play their cards exactly right for the current valuation to stick."Not only is Peloton slashing the price of its Bike, but it will hike marketing spending significantly in the coming months.
Peloton has stated previously that it sees an opportunity to reach roughly 15 million households globally, and sell 20 million units of equipment, compared with the 2.33 million it has sold to-date. "Lowering the cost of the Bike may grab new customers, but it shouldn't extend their lifetimes," Siegel said. "And if anything, one can make hypothesis that the lower the initial cost, the lower the barrier to churn [or drop the service]."
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