This is the first post in our “Is it worth the investment” series. We hope you love it 🙂
I first learned about the Peloton craze along with most people – when the pandemic kicked off in 2020, and it seemed like the whole world was obsessed.
It never even crossed my mind to get the bike at that time because #1, I am pretty frugal!! And #2 I was enjoying plenty of bike rides in the outdoors thanks to an actual bicycle that my Dad fixed up for me – I was living my best outdoor life.
Fast forward to 2021, I met the love of my life, and he came equipped with a Peloton :). Suddenly, I had immediate access to this incredible device, and I felt intrigued to try it.
To use the cool bike, I needed to get myself some Peloton shoes (retail for a whole $125 on their website). I proceeded to try them on, clipped myself in, and went on my first ride with AllyLove. The rest is history.
In short: I AM OBSESSED.
Having the bike conveniently inside my apartment is a massive motivator to work out and move my body.
I’ve made those 20-30 minute classes part of my morning routine. For the first time in a very long time, I am excited to wake up before 6 AM on most mornings to bathe in those workout endorphins. I carry that momentum of productivity and feel-good endorphins through the rest of my day – to me, that’s priceless and worth every penny.
The workouts go beyond just biking – they have strength training, yoga, boxing, even meditation.
Also, I want to touch up a bit on the actual engineering behind the bike. WOW. Just WOW. I mean, I know nothing about engineering. However, one of the first things that crossed my mind during one of my first rides was, “WOW. This bike is well-made.” Whoever designed it and its functionalities thought of absolutely everything.
In addition to the bike (the “cheapest” one retails for $1,495 + $250 delivery fee), to get the full Peloton experience, customers need to buy “official” shoes and pay about $39 a month to gain access to the virtual library of replays and live classes.
Side note: You could buy “imitation” shoes via Amazon to save a few bucks. However, now that I have used the originals for a good amount of time, I would say go with the real thing.
Now, let’s get to the point of this post:
Are the product (bike) and service (the membership) worth the investment?
Keep in mind that I am the type of person who finds joy in saving and investing. I typically stay far away from buying anything I consider “over the top” expensive unless necessary.
This peloton situation is a rare exception to my usual ways. Knowing what I know now, I can confidently conclude the Peloton “ecosystem” is worth the investment.
The combination of fun classes and phenomenal instructors is what makes this investment worth it, in my personal opinion.
If you’re curious, my favorite instructors so far include Alex Toussaint, Ally Love, Camila Ramon, Cody Rigsby, Jess King, Kendall Toole, Robin Arzon, and Tunde Oyeneyin.
Now, is this worth the investment as a stock?
“Gray” – which means I am “on the fence.”
Many people that invested in the company in 2020 are likely hating the stock right now. Many probably sold it long ago out of pure frustration.
Consider this: Peloton stock reached a high of $167.42 per share on January 13th, 2021. Fast forward to March 23rd, 2022, the stock ended the day at $28.94 – a capital loss of over 80% which is terrifying to say the least:
With that said, despite what appears to be an alarming downward spiral, I believe the product and service are strong and have a solid “cult-like” following. It is hard for me to see the company disappear or go out of business anytime soon.
David Gardner, the founder of the Motley Fool, coined the term “the snap test.” As part of the overall puzzle of making investment decisions, he suggests that we consider whether anyone would “care” if a business disappeared overnight or at the snap of our fingers.
Right now, in the case of Peloton, I feel that a whole lot of people would care. More than 6.6 million, to be exact – the number of subscribers they have as of December 31st, 2021.
The business is not perfect by any means, and the management has probably failed investors more times than most would like to remember.
However, I still feel that this business will find its way back to operations success. It is also very probable that they can eventually get acquired by a conglomerate, as the rumor mill has been whispering.
Only time will tell.
In the meantime, I would not mind grabbing some shares and seeing what happens next.
TELL ME- What is YOUR PERSONAL OPINION regarding this business as a stock or as a product/service? Share in the comments.
Important reminder: This post is for educational purposes only. It is not a recommendation to buy the stock. Investing involves risk, including loss of principal. Make sure to do your due diligence before making any investment decision.
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