Peloton’s market cap is 7.9 billion.
Six months ago it was 41 billion dollars.
As a stock, Peloton is the crash of 2021, but the numbers are actually pretty good on surface.
2021 revenue was 4 billion dollars.
Up from 1.8 billion in 2020.
Which was up from 915 million in 2019.
Which is up all up from 2017, during their first public filing at 219 million.
Revenue since 2017 has gone up 1726%.
Issue is the company doing this has never been profitable a single year and while the losses moved from over 50% of revenue to under 5% of revenue, they still exist.
Which on a valuation or 41 billion to 4 billion in revenue, to justify 10x the total valuation while still losing money and no evidence of expanded margins is a problem.
Looking at why the stock is crashing, it seems the answer falls with COVID and the case of this being a Sphero.
For reference, Sphero was the company that Disney licensed to make the BB8 toys when Star Wars episode 7 came out and did over 100 million in sales off of it, which was up from only a few million a year prior.
The CEO bragged about printing money, but the moment the fad ended, sales went to normal.
Peloton blew up as a by-product of COVID and the fear gyms would collapse, with rising sales for the peloton treadmill.
All said and done though, I don’t think buying the company at this market cap would be the worst buy ever.
I’d not do it, but there’s a chance they could stabilize revenue as a result of Omicron/Delta and recover this year, if margins could go up.
Unlikely, but possibly worth the risk.