Peloton To Ride Higher

This In the current market downturn, traders are scanning the markets for stocks which are outperforming and riding against the tide. Peloton, is achieving just this. Furthermore, there is a good chance that its strong ride will continue even after the current restriction on movement end.

With the number of people in lock down increasing and the potential length of the imposed lock down’s also being stretched, people are turning to home workouts to keep fit and occupied during these testing times.

This is good news for Peloton, which sells home workout equipment and streamed exercise classes through a subscription service. It also offers, through an app, workouts for people without its exercise equipment. Total downloads of this app have increased 5 fold in March compared to February. According to analysts at Evercore ISI the conversion rate from the app to equipment is just shy of 10%. The Peloton stores in New York and London may be closed, but deliveries to new customers are still being made.

Whilst indications are pointing to blowout quarter thanks to the coronavirus lock down, figures were impressive even before the outbreak despite a lukewarm IPO. In Q2, reported in December 2019, revenue rose +77% to $446.3 million up from $269.9 million. Recent review activity and scores indicate that consumers’ attitudes towards peloton continue to improve despite its hefty price tag.

Peloton for life not just for quarantine
The bikes are expensive at around £1900. If someone invests that amount of money into exercise equipment, the chances are it is because they are looking to continue using the equipment and streaming services going forward after the quarantine ends. The same could be said for the app, if people have tried out home exercising and enjoyed the experience there is a good chance that they may try to continue the habit after the lock down period ends.

Chart thoughts
After dropping to a low of $17.70 (16th March) the stock has surged over 55% in just two weeks to its current price of $27.96. Far outperforming the Nasdaq, which has gained just 7%.
A meaningful move over its 100 sma (4 hour chart) at $28.50 could see more bulls jump in.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.