Peloton surged up to 6% on Tuesday to near-record highs after it announced a price cut to its existing connected bike, along with two new exercise products.
A very exciting time for the supporters and apologists of Peloton Interactive, Inc. (PTON) as the shares price is once again taking a hike. After the company reported that it is cutting price of its core bike series and the addition of two new products, PTON surged up to 6%, with almost hitting the day’s high by 14% on Tuesday.
The exercise equipment and media company recently announced the two new products to its existing product line which now adds premium and budget version bikes and treadmills.
As the gymnasium industry has been hit badly by the COVID-19 outbreak, people have turned to home workouts. According to the vice president of communications for the IHRSA, Meredith Poppler the workout industry lost around $700 million per week during the peak time of pandemic and shutdown. By August 1, the industry had lost $10.3 billion giving a major setback to fitness clubs. With estimated reports, the forecast says that as many as 25% of fitness clubs could close by the end of 2020.
Starting from today, Pelotons core bike will cost $1,895, which has been reduced by almost $350, whereas the monthly financing rate dropped by $9 to $49 per month. The price drop will attract more customers as the company wants to end the year on a high. Peloton’s objective is to facilitate customers at home, as the gyms are currently working under strict COVID-19 rules.
The company is expanding its products portfolio with a new model, Bike+. The price of its new model Bike+ costs $2,495, which comes up with a bigger screen, improved speakers, and a new feature of automatic resistance change. The screen can also be tilted so customers can do floor workouts with its new, full-body classes, which is expected to launch on September 15.
The existing members of Peloton can trade their working bikes for Bike+ by paying $700 in credit. While the older model of treadmill remains at $4,295 price, whereas, the new treadmill will be low cost product available at $2,495, which is set to launch next year.
The company is progressing with promising development that will attract new customers. Peloton Interactive, Inc. (PTON) stock has recorded a growth of almost 200% for this year, which is quite impressive considering the fact that COVID-19 has created unprecedented economic conditions.
However, the closure of gyms has attracted more users towards home workout and people are turning to other workout equipment such as Peloton’s bikes and treadmills. As per the analysts from J.P. Morgan Securities, Doug Anmuth and Cory Carpenter wrote in a note:
“We believe PTON is very well positioned entering 2021 with a broader product suite, and with Tread market size potential two-to-three times that of the Bike and largely not reflected in our estimates.”
Peloton stock after dropping to the lows of $72.84 at 10:30 A.M. on Sept. 4 has once again picked up the momentum trading back at near-record highs. Peloton Interactive, Inc. (PTON) closed the market on Tuesday at $85.60 after starting the day at $79.38. PTON share price reached the highest price mark of $91.84 at 01:38 P.M.
Currently, at 9:05 A.M. before hours, PTON is up by 4.38% trading at $89.35.