You might never have heard the name Peloton prior to 2020. Then the pandemic hit. Gyms closed, people were all at home, and Peloton became a household name. If you jumped on Peloton stock at that time, then you’ve probably been really pleased with your savvy investing. However, is Peloton still a good investment today, two years after the start of COVID-19? Probably not. Let’s consider why.
Did Peloton Stock Hit Its Peak?
Investor’s Business Daily explains that Peloton Interactive (PTON) was a wonderful investment in 2020. Shares gained more than 400% that year. If you realized early into the pandemic that this home-based fitness company would soar, then you were smart. However, things have been going downhill for Peloton stock ever since. According to the report, the company’s stock peaked back in January 2021, more than a full year ago. Shares have reportedly dropped about 80% in value since then.
Peloton sells fitness equipment as well as digital classes to participate virtually in using that equipment. It was popular during the height of COVID-19 because so many people were looking for ways to safely exercise at home. Gyms were closed across the country. Even in places where they re-opened, many people didn’t feel safe going t the gym. And yet, people missed the interactive accountability of going to the gym. Peloton, with its home fitness equipment but online community, filled that gap.
However, as people return to work and to gyms, the need, desire, and even appeal of working out at home with Peloton has faded a bit. Additionally, there’s more competition in the marketplace as new companies emerged to ride in the wake of Peloton’s success.
Current Problems in the Peloton Market
People want to get back to gyms and fitness classes. However, this isn’t the only reason that Peloton stock isn’t a good investment right now. The company is struggling with a variety of other factors that make this an iffy choice for investing.
Co-founder and CEO John Foley has stepped down recently. The company paused production on its equipment due to decreased profits. Furthermore, the company has announced a large number of layoffs that have people wondering what’s going to happen as the company moves forward. One potential option is a buyout. While that rumor’s release created a brief surge in the value of Peloton stock, that surge is likely brief rather than enduring.
Of Course, You Never Know About The Stock Market
Industry professionals say that Peloton stock isn’t a great investment right now because of these factors. However, you obviously never know what’s going to happen in the market. A new pandemic surge could shift things. Additionally, if there’s a company buyout, things could turn around in a positive way. Therefore, if you have a gut feeling that the company could do well in the future, then perhaps you’ll want to go against the industry advice and invest in the company. Moreover, if you already have Peloton stock, the you might want to hang on to it.
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Kathryn Vercillo is a professional writer who loves to live a balanced life. She appreciates a good work-life balance. She enjoys balance in her relationships and has worked hard to learn how to balance her finances to allow for a balanced life overall. Although she’s only blonde some of the time, she’s always striving for total balance. She’s excited to share what she’s learned with you and to discover more together along the way.