PTON: Exercise Bikes Are Not Revolutionary

Peloton (PTON) – one of the hottest stocks during the pandemic – clearly benefitted from everybody being locked down as revenues are now rolling over year over. In the 1Q22, revenue was -24% year over year and PTON guided 2Q22 revenues to be -27%.

The question at this point is whether PTON has any value at all. PTON had $879 million in cash at the end of 1Q22 but Free Cash Flow was -$1945 million over the last nine months. Obviously this is not sustainable without PTON greatly reducing its burn rate or raising additional funds. Another alternative is being acquired.

I remember being told during the pandemic when I was skeptical that PTON was going to revolutionize fitness but it turns out that exercise bikes are not revolutionary.

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