It's possible that number has crept up over the past five years. Supposing you made equal investments in other stocks, your portfolio would only have room for about 12 or 13 stocks. When investing in stocks , you might want to be more diversified than that. That said, investing an outsize amount in a single stock can make sense when the situation is right.
As investing legend Charlie Munger said: "The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. Watching an exercise session on a Peloton bike. Image source: Peloton Interactive. These are what investors rely on in the days leading up to shares trading on the public market. Furthermore, it's total addressable market which accounts for future fitness-product possibilities was estimated to be nearly five times that of the SAM.
That indeed sounds like a juicy growth-stock opportunity. But Peloton wasn't without risk. For example, the company's SAM was estimated at 14 million connected-fitness hardware products. But these machines are pricey, and investors questioned whether that many people would actually buy a Peloton -- especially when competitors offer cheaper options.
The company has since settled the case, but at the time of the IPO, it was cause for concern. To summarize, Peloton looked impressive in its registration documents. But this isn't surprising since most companies frame their growth narrative in an attractive way when going public.
There were also some concerns about the IPO, but that's true of all stocks. That's why it's important to dig deeper to uncover the makings of a strong long-term business model. Here's what got me to believe Peloton might be building something special. And its customer retention metrics were off the charts. This strongly suggested Peloton was building a sustainable and profitable business for the long haul. And the stock traded at only around seven times trailing sales at its IPO despite growing revenue by triple digits.
That sounds like a business worth placing a big bet on. That's a one-year return any investor should be proud of. But remember: One year is still a short time frame. It's best to keep looking ahead over the next three to five years. Between connected-fitness subscribers and digital subscribers, Peloton has fewer than 1. But the company just laid out a plan to get to million subscribers in the years ahead. That number is so big, it almost doesn't seem realistic.
Citigroup Global Markets Inc. A registration statement relating to the offering of Class A common stock has been filed with the Securities and Exchange Commission " SEC " and became effective upon filing. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Peloton is the leading interactive fitness platform, with a loyal community of more than 6. The company pioneered connected, technology-enabled fitness, and the streaming of immersive, instructor-led boutique classes for its Members anytime, anywhere. Peloton makes fitness entertaining, approachable, effective, and convenient, while fostering social connections that encourage its Members to be the best versions of themselves.
An innovator at the nexus of fitness, technology, and media, Peloton has reinvented the fitness industry by developing a first-of-its-kind subscription platform that seamlessly combines the best equipment, proprietary networked software, and world-class streaming digital fitness and wellness content, creating a product that its Members love. This press release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of , as amended, and Section 21E of the Securities Exchange Act of , as amended, which involve risks and uncertainties.
These forward-looking statements include, but are not limited to, statements related to whether or not Peloton will consummate the offering, prevailing market conditions, the anticipated use of the net proceeds of the offering, which could change as a result of market conditions or for other reasons, the impact of general economic, industry or political conditions in the United States or internationally, risks related to the impact of the COVID pandemic; and any statements of assumptions underlying any of the foregoing.
You can identify these statements by the use of terminology such as "believe", "plans", "expect", "will", "should," "could", "estimate", "anticipate", or similar forward-looking terms. You should not rely on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements.
For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the "Risk Factors" section of our SEC filings, including our most recent Form K and Q, which are available on the SEC website at www.
All forward-looking statements contained herein are based on information available to us as of the date hereof, and you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements.
Peloton utilizes a direct-to-consumer multi-channel sales platform, which includes sales specialists, support teams, a high-touch delivery service, and 81 retail showrooms across the U. The U. Revenue is probably the key metric that investors researching the Peloton IPO want to know. And it is. Still, management is confident about controlling the costs associated with music licensing. As a result, we expect to be able to manage music expense such that, over time, these fees as a percentage of subscription revenue will flatten, or even decrease.
Now, because Peloton is associated with tech, investors will be monitoring the size of its user base closely. You see, in this day and age, tech stocks, especially tech stock IPOs, are as much about the user base as they are about revenues and profits. The idea is, if a company has gotten a large enough user base, it has a good chance of monetizing opportunities. As of June 30, Peloton had more than 1. Peloton noted that the average Connected Fitness subscription was used by approximately two members.
Some of you are probably wondering just how many customers actually stick with paying the monthly fee after they purchase a Connected Fitness product. And the Peloton IPO is no exception. As we saw earlier, the company more than quadrupled its revenue from fiscal to fiscal From June 30, to June 30, , the number of Connected Fitness subscribers grew from , to ,, marking a staggering Source: Ibid.
Peloton is not yet profitable. Peloton intends to use the proceeds from its IPO mainly for working capital and other general corporate purposes. These may include research and development, sales and marketing, general and administrative matters, and capital expenditures.
The company may also use part of the proceeds for acquisitions or investments in technologies, businesses, or solutions that would complement its own business. In my opinion, the No. When Peloton sells an exercise bike or treadmill, it earns revenue from that sale.
But the transaction does not stop there. In other words, Peloton has combined the exercise equipment business one-time sales with a gym membership-like business, creating a recurring revenue stream. At the end of the day, like many growth-stage tech companies, Peloton Interactive, Inc.
And it remains to be seen when it will turn a profit. You can unsubscribe at any time. Credit Card is NOT required. Can We Expect 10x Gains? Here's everything you need to know about the upcoming Peloton IPO. I reported it, then moved it to my savings account. Have I done enough? Search Ticker. PTON U. Last Updated: May 27, p. EDT Delayed quote. After Hours Volume: Volume: 8. Customize MarketWatch Have Watchlists?
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ET by Tomi Kilgore. Peloton, iFIT settle all pending litigation between the companies May. This Analyst Still Upgrades the Stock. Peloton downgraded to hold from buy at Stifel Nicolaus May. No Headlines Available. Other News Press Releases. ET on Benzinga. ET on InvestorPlace. ET on Motley Fool. ET on GuruFocus. ET on StockNews. MSD Partners, L.
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signage during the company's initial public offering (IPO) across from the Nasdaq MarketSite in New York, U.S., on Thursday. ketor.xyz › /01/20 › pelotons-market-value-drops-by-2point5-b. Shares of Peloton tumbled 11% in the company's market debut Thursday, giving it a market value of $ billion. The opening trade was $27 per.