Peloton (NASDAQ:PTON) stock is up 12% today after the at-home fitness company unveiled its indoor rower.
As of early afternoon trading, PTON stock has surged more than 12% higher. This move greatly outpaces the market, though a range of high-growth tech stocks are seeing impressive gains today.
A former pandemic darling, Peloton has been under immense pressure in 2022. This stock has fallen nearly 90% from its 52-week high of $129.70.
Today though, investors are bidding up PTON stock on product expansion news.
PTON Stock Surges on New Product Reveal
Peloton is a company famous for its high-performance stationary bikes and online classes. Its subscription-based business model was the envy of its fitness peers at the height of the pandemic, with demand outpacing supply to a degree many investors didn’t expect.
Of course, that was when gyms were completely shut down and at-home fitness was the only kind of fitness. Today, the thesis has changed a great deal for Peloton. Consumers are back to working out in gyms and Peloton is looking to get creative with growth levers.
One such lever is product expansion. The launch of the company’s Tread treadmill has been met with mixed results. However, it’s yet another revenue stream, and one the company thinks will perform well in the long term.
Today, at its Homecoming event, Peloton teased that it is yet again expanding its lineup. This time, Peloton is looking to disrupt the rowing market with a connected, indoor rower. The idea is that customers looking to build out their home gyms or replace their rowers for Peloton-branded ones will flock to this product. Consumer expectations are high as this is a product that Peloton has teased for a while.
Right now, Peloton is among the most difficult stocks to value. Determining what the company’s revenue and earnings will be a quarter from now, let alone a year or five years down the road, is difficult to do. And while this new product may change the calculus somewhat, I’m not sure it moves the needle much. Investors may want to wait to see where PTON stock settles down from here, especially after today’s impressive move.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
