What’s the Deal With Peloton Stock Today?
- Shares of at-home fitness equipment maker Peloton (NASDAQ:PTON) plunged Monday on concerns related to the safety of Peloton machines, particularly as it relates to children and pets.
- Peloton stock dropped more than 7% to just above six-month-lows.
- As of this writing, Peloton’s stock is trading 2.4% lower.
Here’s What Happened With Peloton
- A month ago, news broke of an incident involving a Peloton Tread+ in which a child died. This incident prompted a broader investigation by the U.S. Consumer Product Safety Commission, or CPSC, into Peloton treadmills.
- The CPSC issued a statement over the weekend warning consumers to stop using Peloton Tread+ machines.
- The organization says they have uncovered 39 incidents to-date.
- Based on an investigation of those incidents, the CPSC said in its release that it believes that “the Peloton Tread+ poses serious risks to children for abrasions, fractures, and death.”
Peloton’s Pose No Greater Risk Than the Average Treadmill
- A deeper dive into the data shows that Peloton machines aren’t any more dangerous that your average treadmill, and that neither present any meaningful risk to children.
- There were 22,500 treadmill-related injuries in 2019 in America, about 2,000 of which involved children under the age of 8.
- Rough estimates peg the number of at-home treadmills in the country at around 55 million.
- Thus, the annual odds of a child hurting themselves on at-home treadmill is 0.004%.
- Peloton’s numbers are even better. It appears there have been 23 Peloton accidents involving children over the past 12 months, on a Peloton subscriber base of about 2 million. That equates to odds of 0.001%.
- Deaths almost never happen on either.
- The data says Peloton’s are not dangerous, and therefore, the drop in PTON stock seems like an opportunity.
PTON Stock Price Forecast
- We do not expect this incident to materially impact Peloton’s demand.
- Consumer awareness of the CSPC warning will remain limited. Even consumers who are aware of it today, will likely forget about it in weeks or months.
- Meanwhile, underlying demand trends for Peloton machines should remain vigorous over the next few months, as the “reopening” actually inspires folks to workout more and test more at-home options. It also helps that this reopening is happening right before summer.
- Peloton stock remains undervalued, with shares trading around $100 and the consensus analyst price target sitting above $160.
- We expect PTON stock to trend toward $150 as we head into summer.
Peloton stock falls into this basket of next-gen technology stocks that represent the future, but which are getting crushed in the market right now. This is the time to buy those stocks for potential 10X returns.
PTON stock is just one such stock. But there are dozens of other next-gen tech stocks out there that represent compelling 10X investment opportunities, and which are screaming buys right now.
We’ve put together a portfolio of these potential 10X stocks in my exclusive venture-capital-style research advisory service, Innovation Investor. To gain access to these excusive 10X investment opportunities and my in-depth research, click here.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s how his Daily 10X Report has averaged up to a ridiculous 100% return across all recommendations since launching last May. Click here to see how he does it.