Cycling to Profits with Peloton

10/14/2020 5:00 am EST

Focus: CONSUMER

Mark Skousen

Editor, Forecasts & Strategies, TNT Trader

One area of the market that we like right now is a trend we’ve been following for some time, as it involves tailwinds such as technology, human wellness and now COVID-19, explains growth stock expert Mark Skousen, editor of Fast Money Alert.

That trend is at-home fitness, and the leading fast-money stock in this space is Peloton Interactive, Inc. (PTON).

We suspect you know what Peloton stationary bicycles are, because they’ve been all the rage in the fitness industry for much of the past two years. And the COVID-19 lockdowns have made the stationary bicycle/fitness subscription firm a prominent force in the stay-at-home fitness trend.

In fiscal 2020, Peloton’s gross sales of $1.83 billion have more than doubled when compared to the previous year. In fact, in its recent fiscal fourth-quarter earnings Peloton posted a net income of $89.1 million with quarterly sales growth of 172% year-over-year.

The company now has over one million connected fitness subscribers who pay $39 a month to have their cycles and treadmills linked to interactive classes. The company predicted it would double that number by the end of its fiscal 2021 year.

Perhaps more importantly, the tailwind of the current health and wellness environment appears to be the perfect environment for Peloton to deliver on that prediction.

PTON is a fast-money juggernaut whose 375% gain over the past 52 weeks is better than 99% of all publicly traded companies. Now that is a fast-pedaling, fast-money winner — and we suspect that there is much more to come.

We expect the company’s bikes and subscriptions to be big sellers for the holidays, as fitness and wellness-oriented people will spend their money on a device they can use in the safety of their own home — with a sense of community that traditional gyms and fitness studios offer, but without the risk of contracting COVID-19.

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