Mr Big is smallest of Peloton’s problems

NEW YORK, Dec 13 (Reuters Breakingviews) - And just like that, Peloton Interactive (PTON.O) had an image problem. The at-home workout company’s shares dropped more than 15% last week after a famous character in the “Sex and the City” spinoff series dropped dead after a class. Peloton said the plot twist surprised it too, but the company remains more vulnerable to collapsing demand than collapsing customers.

Peloton shares have lost nearly two-thirds of their value in the past year. Even before the fictional Mr Big met his end, the stock was battered read more after CEO John Foley said he underestimated how easing Covid-19 trends would affect business. Peloton’s enterprise value is now around 3 times its estimated revenue for its fiscal year ended in June, less than half the multiple on which yoga gear-maker Lululemon Athletica (LULU.O) trades.

Peloton is pedaling far ahead of rival cardio-kit maker Nautilus (NLS.N), whose top-line is estimated to drop over the next year. Peloton’s revenue is still estimated to grow by a third, according to Refinitiv. Maintaining that edge, though, means Foley needs to keep every customer he can, fictional or not. (By Lauren Silva Laughlin)

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