Peloton shares soar as home trainer popularity continues

Manufacturer of home-based cycle trainers Peloton has recorded its first ever profitable results and projects revenue to double in the not too distant future.

Posting a quarterly profit update (to June 30th) yesterday, the statement revealed that the number new customers subscribed tallied around 1.1 million, a 333% leap like-for-like. This equated to the first quarterly profit, tallying $89 million versus a $47.4 million loss last year.

That’s represents a quick and no-doubt Covid-19 induced rise from 886,100 gained during Q3 and brings the firm’s total membership base globally to around 3.1 million. (The current results are the firm’s Q4 readings)

The significant growth during 2020 has seen the firm’s Q4 revenues rise 172% year-on-year, reaching £474 million. For the year as a whole, revenue grew 100% to reach $1.8 billion.

As elsewhere in the bike industry, the spike in demand hasn’t been without problems, the kit is in such high demand there are now waits for some equipment. This is unlikely to improve in the near term, despite the business moving to acquire its supply chain manufacturer late last year. While others in the bike business may be short on components, Peloton has a heavy digital element with touch screens among the components required for each build.

In the statement the firm said that it will cut prices for both its treadmill and bicycle product in a bid to further expand the subscription base. Customers will soon pay $1,895, as opposed to $2,245. Alongside this, newer more premium tier versions of the flagship design will also come to market.

At present, the firm’s user engagement is rising fast while people remain home much more of the time. Users have averaged 24 workouts a month over 12 one year ago recently.

Peloton shares hit an all time high on the news, retreating later in the day as investors took profit. Since March when the first wave of Covid was hitting its stride the firm’s share price has risen around four-fold.