Is Peloton the next short-lived fitness fad? I believe they have a lasting product with the engagement of a live class and the convenience of a home workout.
Currently, heavy up-front investments in a new headquarters, its treadmill product, its supply chain, and an international expansion mask a highly profitable business. Profitability will come with scale.
I see further potential upside to consensus sales, driven by its treadmill product, higher marketing expense, and geographic expansion into Canada, UK, and Germany.
Sum of the parts valuation, with a 3-4x 2021 sales multiple on the equipment segment, and a 8-10x 2021 sales multiple on the subscription business, points to a $30-34 stock price.