Monday, February 7, 2022

Peleton (PTON) serves as pandemic proxy

In the face of the reopening trade, safety concerns, slower customer growth and even a cameo in a the Sex and the City reboot, Peleton (PTON) shares have been under pressure. Just this morning, the stock dropped below its IPO price, only to rebound on CEO John Foley stepping down and former Spotify executive Barry McCarthy taking the reins. It seems investors are looking through 2,800 jobs on the cutting block and a slashed revenue outlook. Ongoing sale speculation is also likely propping up the stock.
  PTON stock since its 2019 trading debut on a logarithmic scale.
But here's why Peloton is such a target right now: it looks extremely cheap! And not just because of its 85% drop since the January 2021 peak. Its price to sales ratio had dropped to below 2. By comparison, the S&P 500 is near 3 on the same metric. And not only does Peloton offer its exercise and treadmill products and an app with 2.8 million subscribers, but it also offers up all the health data that comes with it. It's no surprise reports about suitors range from Amazon & Apple to Nike, and even Disney. 

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