Although people have been finding their way back into gyms as of late, leading at-home fitness company Peloton (NASDAQ:PTON) really has nothing to worry about. This brief shift in focus away from at-home workouts is exaggerated, and PTON stock’s struggle in 2021 is due only to near-sighted weakness from investors who fail to see the long-term potential of this company.
Stay-at-home orders during the pandemic naturally boosted sales of Peloton’s machines. Everyone had to stay home, so it’s no wonder at-home workouts became all the rage.
But, even as gyms reopen, we don’t see them posing a threat to Peloton’s bottom line.
As we saw with physical shopping, people just want to experience something they haven’t in a long time. Digital e-commerce growth slowed once re-opening began, but these are all short-term trends.
So, while investors think at-home fitness was the short-term trend, the real short-term trend here is working out in gyms, which traditionally haven’t been able to satisfy the average customer to the same extent as Peloton.
It’s no wonder one of the most common New Year’s resolutions is to “go to the gym more.” Going to the gym out of principle alone is tough, and going to the gym for no reason other than just “to go” simply doesn’t work for most people.
You have to enjoy working out, in some sense, to benefit from the lasting lifestyle or health impacts of exercise. And you also need direction. Random exercises strung together, completed with improper form, will likely only result in injury.
Peloton to the Rescue
Peloton is the complete fitness package.
You get the convenience — and efficiency — of being able to work out at home, the guidance of a world-class instructors with a variety of teaching styles, and the fun, social aspect of working out (virtually) alongside other people.
Does working out at home work for everyone?
Certainly not. Some people need access to equipment they can’t feasibly purchase and store in their own home. Some people have different fitness goals than can be achieved using Peloton’s equipment and app.
But for a majority of people, Peloton hits that sweet spot when it comes to fitness.
The workouts you get with Peloton are really good because of advancements in workout technology. And because of this, consumers will continue to buy Pelotons in bulk, and the Peloton community will continue to grow.
On top of all of that, Peloton is strategically working to leverage business and healthcare partnerships to embed itself in the daily lives of folks who otherwise wouldn’t be customers.
For example, Peloton just teamed up with UnitedHealthcare to provide millions of individuals with access to Peloton’s digital fitness app. which features a plethora of on-demand fitness and health classes.
This follows the roll out and expansion of Peloton’s corporate wellness program.
The Bottom Line on PTON Stock
We see all of this as fueling Peloton’s growth spree.
While consumers continue to buy Peloton equipment, the company’s big opportunity is to penetrate the healthcare and commercial markets. If they can continue to do this, they’ll find themselves winning over huge swaths of customers all at once.
Peloton is executing strongly toward that goal today, and as long as that company trajectory continues, PTON stock will power even higher.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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