THE NEW TECH CULT: PELOTON
STOCK DEEP DIVE
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THE NEW TECH CULT: PELOTON
This is the longer version of my twitter thread so do read and enjoy 😊
Hope ya'll have a good week…
Every day I wake up and stare at an empty corner in my apartment and say to myself “wow if only I could bike to the jams of Beyoncé today with my supportive workout friends”.
Do I actually do this? No, I hate cardio. But apparently there is enough Americans that pretend to and these cult bikesTM (my new name for Pelotons) are FLYING off the shelves and the stock has gone nuclear since IPO.
Here is a semi serious article about why I think Peloton could be the next big thing…
1/ PELOTON X BEYONCÉ
In an unprecedented deal, Peloton has multi-year partnership with Beyoncé. One could rumor this is the equivalent of Joe Rogan signing with Spotify in my opinion. Why?
Peloton is making Beyonce themed workouts featuring her music. I would be beyond shocked if her upcoming releases aren’t featured during these workouts bumping up her streaming numbers. And this is just the beginning for artist relationships with Peloton…
2/ VIRTUAL CONCERTS ARE THE NEW WAVE
Epic games brought this to the forefront with Marshmello and Travis Scott fortnight virtual concerts. 10 million ears tuned into Marshmello’s concert… yes you read that right 10 MILLION. That’s insane! Think of how many people after those virtual concerts went and downloaded songs from Mellow and Scott? If Beyoncé themed workouts prove a big bump in her streaming numbers other artists are going to be clamoring to be featured on the workouts. On top of this, there are many opportunities for advertising revenue for peloton in the future during these workouts…
3/ PELOTON IS A STATUS SYMBOL
Americans love status symbols. Leasing fancy cars, buying phones they can’t afford, and next up in the status symbol pipeline is the cult bike. $PTON bears love to say “ just wait until it becomes a coat rack!! I say NAY! If I didn’t use my Peloton bike I’d still have that sucker planted in the middle my living room absolutely glistening. What’s better than showing people you not only have money but you also care about working out? Americans eat this sh*t up.
Status Symbol Cont.
If I had a Peloton bike and I didn't use it you would NEVER see clothes on it that's for sure. I'd have that sucker planted square in the middle of my living room absolutely GLISTENING. What's better than showing people that you not only have money but you also workout? couggh Almost like Lulu Lemon for example cough
4/ MY STATIONARY BIKE IS FASTER THAN YOURS
A lot like greed/having status symbols, competition is a close cousin. Peloton has sparked millennial competition during quarantine like no other. You can track live what place you are in during the workout and see where you end up in the field. On top of this you can see other statistics about your workout (how many calories you burned, cadence, output etc.). If you are a nerd you can export this data into excel and yada yada. If I had a Peloton bike my username would be LanceArmstrong2.0 and do anything to get first. ANYTHING. I brought this up just to share the famous Bill Burr bit about Lance Armstrong…oh how great it would be to have him be an instructor. STAY ON THE BIKE LANCE!
5/ PELULU
Moving on to the more serious part of this thread - Peloton has moved into apparel in a big way (another revenue stream). Like Lulu Lemon, you can show off to people outside of your home that you not only workout but also you have money (unless you’re a poser and buy gear without owning the bike). In all seriousness, Peloton sells in their brick and mortar stores and online stores hoodies, bras, and various types of workout gear. Pictured below are some Grateful Dead x Peloton collab merch sold on their store again proving that music will be a big part of their future. I see their expansion into apparel only going up.
6/ MORE THAN A BIKE
Peloton’s one-year retention rate is 96%, which is higher than Netflix (93%). That is simply incredible. To play devil’s advocate the company hasn’t been around as nearly as long at Netflix but the number is still mind-boggling.
7/ $PTON
A typical recession would have buried Peloton. A pandemic and glooming depression? Catapulted it. Let's get into the nitty gritty about $PTON with the help of my favorite deep dive service @ycharts. Up 292.3% since IPO (27 ->100 a share).
7/ $PTON FINANCIALS
Market Cap: 29.4B, PE Ratio: 359, Rev (TTM): 2.3 B, Rev (Qrtrly YoY %): 232.4%, Not profitable (yet). Guidance: Q4 rev $500M - $520M. Fiscal 2020 projected 1.04M-1.05M subscribers. Fiscal 2020 rev $1.72B - $1.74B. It has all the symptoms of a growth stock...
8/ $PTON ORDERS
Peloton orders have been through the roof and there is a backlog. With Christmas around the corner this demand will only increase - insane demand = no need to spend on ADs. which in turn could turn this company into the green!
9/ LONG $PTON
Cont. to eye retention rate, sub growth (currently 94% YoY), & burn rate. With this crazy demand $PTON will lay off ADs and save a ton of money. Orders will boom through Dec.
If you enjoyed this thread or know someone long $PTON please give it a like & a share - Those that follow me on @joincommonstock know that I entered $PTON in Sept. & sold most my bag in Oct. for a 67% gain (but I am looking to add more after this recent dip!). This is all my personal opinion about $PTON and not financial advice. Do your due diligence!
Also… I bought some $BTC (Bitcoin) for the first time and Twitter seemed to love it.
I figured it might be worth mentioning: My girlfriend uses the non-bike subscription for Peloton classes and she is constantly talking about her favorite instructors. I haven't quite figured out what implications that could have for the future of the company/industry but it's definitely bullish!