Peloton's Bold Rebranding
Peloton (NASDAQ:PTON) has undergone ups and downs in recent years. The COVID-19 pandemic led to a surge in sales as people sought at-home exercise options. Now, Peloton aims to rebrand itself by shifting focus to the more accessible Peloton App and expanding its customer base.
Moreover, Peloton has implemented a tiered system that provides different levels of content at varying price points, with the goal of attracting new customers who were previously deterred by the high prices of the equipment and granting them access to the classes.
The impact of this rebranding remains uncertain. Existing Peloton equipment owners may not appreciate the ease with which newcomers can join the Peloton community, as it diminishes the exclusivity and club-like atmosphere that they valued. These dedicated customers have long supported the company and paid a premium to be part of the elite Peloton community.
Additionally, while new app subscribers only need to pay $24 per month for the Peloton App+ membership on their personal devices, owners of Peloton equipment will still have to pay $44 per month for the Peloton All Access Membership to access classes displayed on the equipment screen. This price discrepancy may alienate existing customers and further change how people utilize their Peloton equipment.
Is Peloton a Buy or a Sell?
Nineteen analysts have rated Peloton in the past three months, resulting in a Moderate Buy consensus rating. Out of these analysts, seven recommend buying, eleven recommend holding, and one recommends selling Peloton stock. According to these experts, the average projected future stock price is $11.75, representing a 36% upside from the current stock price. Year-to-date, Peloton stock has gained 6.4%.
Peloton has faced challenges as its stock soared between 2020 and 2021. Over the past three years, however, the stock has experienced an 83.02% decline in value. Nevertheless, the company holds potential for positive returns in the future through its rebranding efforts, which aim to attract a larger audience and drive traffic to the app.