Peloton shares collapse as consumers return to gyms

Peloton shares have collapsed at least 30% since Nov. 5.

As reported by CNBC, at least four Wall Street investment firms downgraded the stock after Peloton’s first-quarter financial report.

Peloton has experienced growth last year with stay-at-home workout trends promoted by the pandemic.

However, that is fading now that consumers can go back to gyms in person.

Planet Fitness has stated that its membership levels have almost gone up to their pre-pandemic peak since Nov. 4.

“From forecasting consumer demands to accurately predicting logistics costs, our teams have never seen a more complex operating environment in which to guide our expected results this year,” says John Foley, Peloton CEO.

Foley also states that Peloton has seen less activity on its website and a decline in shopper visits to its brick-and-mortar stores. The company has already cut the price of its original bike products by 20% in August. 

Peloton now expects to have 3.35 to 3.45 million subscribers by the end of June, a decline from its earlier target of 3.63 million subscribers. 

Analysts at JPMorgan have removed Peloton from its focus list. But JPMorgan still believes that Peloton’s treadmill could reach a bigger market than its bike business.

“We believe Tread is off to a slower than expected start, but it remains early and sales have picked up since Peloton started marketing the product ~30 days ago,” says JPMorgan.