The Rollercoaster Ride of Peloton Stock resulted in a 96% loss in just 3 years

Credits: Canva

By: Aquib Nawab


Peloton's stock journey has been tumultuous, reflecting the company's rollercoaster-like business performance. An investment of $1,000 in Peloton stock three years ago would now be worth only $40, resulting in a 96% loss as of Jan. 29.

Peloton's Recent Performance

Credits: Wired

In fiscal 2021, Peloton reported sales exceeding $4 billion, marking a remarkable 120% year-over-year increase. This surge in revenue was primarily driven by the COVID-19 pandemic, as consumers sought home-based fitness solutions.

A Peek into Peloton's Fiscal 2021

Credits: Peloton

Troubles on the Horizon

As the economy reopened, Peloton faced declining demand and rising losses. In fiscal 2023, revenue dropped to $2.8 billion, a 30% decrease from two years earlier. Cumulative net losses in the last eight fiscal quarters amounted to $3.9 billion.

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The once-thriving Peloton member base of 6.4 million has displayed signs of stagnation. These challenges prompted the removal of co-founder John Foley as CEO, with Barry McCarthy taking over leadership.

Membership Base Stagnation

Credits: Wired

Under the guidance of Barry McCarthy, Peloton has shifted its strategy towards generating more revenue from subscriptions rather than hardware sales. The company is increasingly relying on an app-based approach to engage consumers while still emphasizing exercise equipment.

New Strategy Under Barry McCarthy

Credits: WSJ

Decline in Digital App Subscribers

As of Sept. 30, Peloton had 763,000 digital app subscribers, reflecting a 13% year-over-year decrease. The digital workouts are designed to funnel users into purchasing Peloton bikes or treadmills.

Credits: Peloton

In a bid to become more cost-efficient, Peloton underwent a significant workforce reduction, laying off 12% of its employees in late 2022. This left the company with substantially fewer employees compared to its peak periods.

Streamlining Operations

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Investors are cautiously optimistic about Peloton's future, anticipating a return to strong revenue growth and a reduction in losses. However, the company must navigate an uncertain economic environment that could pose challenges to its recovery.

Looking Ahead with Caution

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Unpredictable Variables

Peloton's future growth and profitability are influenced by numerous unpredictable variables. These uncertainties contribute to the high level of risk associated with investing in the company.

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Wall Street analysts do not foresee Peloton posting positive operating income in the near future. Even as far ahead as fiscal 2026, significant losses are expected, reflecting the skepticism surrounding the company's prospects.

Wall Street Analyst Expectations

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2 Massive Growth stocks turned $5,000 into $1 million in 20 years