It’s going to take a few months before they can show a recovery.
That report also indicates the API has been corrected. So “has exposed” would be the proper formulation.
Fair enough. However, if they had fixed it within the 90-day deadline the vulnerability wouldn’t have been publicized at all.
As a software developer myself for the last 20 or so years and an employee of a large tech company which deals with security issues such as this I would say this isn’t the greatest look.
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Yeah, Foley decided to flex and it bit him when the stock began to drop. Then, after bowing, the stock sunk on the flip flop.
I bought it twice, both in the $20s, still hold all the shares and plan to continue to do so.
As to your question: the larger question for yourself is whether you are a short term trader (e.g. <12 months) and thus, whether you believe in the company long term. If you look at Apple in the early 90s, after their long run with the Mac they got kicked pretty hard. But with Jobs return and later Cook taking over, they demonstrated that they were a great company.
I don’t know if Peloton could achieve Apple’s success, but IMO they are a world class company. An unfortunate incident(s) and poor PR handling of it initially doesn’t change that. I haven’t decided yet whether to buy more shares, but I’m definitely not selling what I have.
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The addressable market is a couple of order of magnitudes smaller.
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DOH!!!
Just three months ago, Peloton told investors that it expected annual revenue of $5.4 billion, but executives pulled that down Thursday to a range of $4.4 billion to $4.8 billion and suggested they will make cuts to find better margins in response.
Also worth noting that they are currently knocking $400 off every bike, another indication that sales have slowed significantly.
Massive increase in orders due to lockdown and lack of available public gyms
Massive decrease in orders due to available public gyms
“We underestimated the reopening impact on our company.”
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uh oh, a crash in the peloton!
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All true. Some company mistakes include missteps with the treadmill and poor assumptions re: pricing of the new vs old bike. And perhaps part of it was out of their control - investor reaction to back to work and back to gyms. And for a company that was in the limelight as much as Peloton was/is, the rise can be great and fall as well. [FWIW: Zoom is in a similar situation]
However, IMO, it would be a fools game to bet against the company. Lots of comments early in this thread centered around the belief that Peloton was no different than Bowflex and other existing players and especially that TR was somehow going to compete. IMO (of course), Peloton remains a great company. Superb management team; superb product offering, especially on the software side. But what is most encouraging for the company’s opportunity, is the notion of going back to work 5 days a week is “permanently” dead. The market for redefining office space and home space is large and growing, including incorporating fitness into the home. And given the quality of Peloton, I think they will rise again - perhaps not to the level they were before in the short term, but for the long term.
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Opening of gyms did hurt their bottom line, but also considering they sold a boat-load of peletons, was there really that much growth in the market for one? After bike and treadmils, maybe rowers- what else?
Seems like most of the people that wanted one, got one and maybe even upgraded.
Also long term, isn’t the dirving going to be subscriptions to their programs?
FWIW I’m not going back to the gym any time soon, recently they sent out an email reinstating mask requirements - I’m not anti-mask, I wear them everywhere in public, but I’d rather work out without one at home with my kettlebells and smart trainer.
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From an equipment standpoint, those are 3 of the obvious. The 4th may be elliptical machines.
In a few countries that may be true of “the upper end” within the end user space. But there are a few directions of continued hardware expansion: 1) international, 2) lower cost units, 3) the leisure and fitness industry (hotels, gyms, and corporate).
Subscriptions has been part of their model since day 1. But it is not as profitable as you would think (yet) due to their acquisition cost of content (instructors, studio equipment, etc). To give you one example of the quantity and quality of their investment in content: When Apple launched their fitness offering, here on the TR Forum many TR users speculated that the big mighty Apple would crush Peloton. That has not only not happened, but Apple doesn’t even get mentioned much other than in the context that there are other competitors in the market. It’s a demonstration of how a company (Peloton) that has a great management team can focus and execute on a plan and succeed even against a much larger and also great company (Apple). Over time I would expect user volume to be such that Peloton makes the subscription business more profitable. But in the meantime Peloton remains focused on continuing their market leadership.
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Peloton feels a little bit like pets.com
It’s basically a virtual spin studio, and during the pandemic that was great. But as the pandemic eases and people want to be social, it’s back competing with all the gyms / spin studios for a not (IMO) super large TAM.
I think it’s a case of “good company, bad stock” right now. Their valuation requires the promise of future growth to believe. Without rosy future growth, valuation reality starts to set in. Things like EBITDA multiples and cash flows and such. They have a lot of work to do to improve their margins. My 5 minute evaluation after looking at their financials 
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Bad stock?
If you bought the stock after it went public your CAGR over the 772 day time frame since then using Friday’s closing price of $55.70 would be 61%. In fact, purchasing almost any time during the next 6 month period until lockdowns in late March 2020 would have yielded an even higher return (shorter time period).
Excluding the “S&P 8” there are probably only another handful of companies on the entire S&500 that have provided similar returns (i.e. 2-3% of the market). Of course, if you are a late adopting herd investor and bought in the 100+ range, of course you would think it is a bad stock.
The question as to whether it is a “good stock” or “bad stock” going forward (i.e. would I invest, stay on the sidelines, or go short) is perhaps similar to most of the S&P500 tech sector bets and includes many factors beyond financial projection analysis (i.e. the subject of behavioral analysis investing).
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Except Peloton in its current incarnation isn’t a tech stock. It’s current model is predicated on people buying its equipment (not cheap), and then signing up for a subscription and keeping that subscription. If you look at its financials, its cost of revenue at the moment is close to 65%.
Unless somehow it figures out how to decrease its cost of revenue, it’s going to keep bleeding money. Plus it has ~$1.5 billion in debt, and added just under a billion in the last year.
So you’re saying you agree with him that it’s a case of good company bad stock RIGHT NOW.
(I made a nice profit off peloton and have lots of friends I met on the platform even though I haven’t used it in a few years. I’m not a hater, but I absolutely agree with his comment, and I think you do too)
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Standard and Poors, the company the determines who is in the S&P500 and each of its 11 sectors includes Peloton in the I.T. sector made up of 6 industries collectively known as the tech sector. Of course, as an individual you can classify companies any way you wish. And to your additional comments, they have lots of challenges to work through.
Getting back on topic…
The big difference between PTON and TR is that PTON customers are buying into a social setting with a 1 to N instructor framework where TR customer are buying into a 1 to 1 instructor framework tailored to them via AI.
TR’s long term value will be the AT. It could be licensed out as a ‘fitness analysis engine’ backend to other companies that do not directly compete with their product or be acquired outright for the data and algorithms.