Peloton (PTON) shares just got a boost....but is the move justified?

November 26, 2021

Peloton (PTON) shares just got a boost....but is the move justified?

Peloton shares popped +7% in early trading today alongside other pandemic winners (like Zoom and Teladoc) as a new Covid variant detected in South Africa stoked fears of potential increased social restrictions. Even considering bullish momentum today, PTON shares remain more than -70% lower year-to-date following multiple quarters of declining growth, wider than expected losses, and slashed outlooks. Should traders be optimistic for a Peloton resurgence? Here's what LikeFolio data suggests... 1. Consumer Mention volume for the new Covid variant is muted, so far.

While the World Health Organization plans to gather to discuss the new variant, consumer mentions surrounding the variant remain well below levels achieved last summer as the Delta variant emerged. And as Peloton reports reveal, consumer behavior changes as a result of the Delta variant didn't prove to materially move the needle for Peloton growth. 2. Peloton Mentions are rising into the Holiday Season but remain well below Pandemic levels.

The Mentions metric is the most highly correlated LikeFolio metric to Peloton revenue, at .79. So this is a very important metric to keep an eye on. While mentions remain significantly higher vs. 2019 levels (+138%), this rate of growth is still stalling. Mentions are -23% lower YoY. 3. Peloton Tread demand mentions are rising, but comprise a lower sample size.

Consumer mentions of purchasing a Peloton Tread have increased as the company rolled out the new machine in the US, Canada, and UK this fall. However, tread mention volume significantly lags generic Peloton and Peloton Bike mentions. Bottom line: consumers don't appear significantly concerned about the new South African variant, yet -- and as a whole, Peloton growth is still decelerating. Make no mistake, consumers who do have Peloton machine, LOVE the product and associated services.  A consumer happiness rating higher than 83% positive (and rising) is nearly unheard of in the LikeFolio universe. Nautilus equipment lags by more than 6 points, for comparison. But for now, these loyal customers may not be enough to fuel the Peloton growth rates the Street is looking for. Stay tuned through an extremely important New Year Resolution season just over a month away. This is when consumers really tip their hands, and we'll be listening.

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