Investors who bought stocks during the Covid-19 market crash in 2020 have generally experienced some big gains in the past two years. But there is no question some big-name stocks performed better than others since the pandemic bottom.
Peloton's Bumpy Ride: One company that has been a lackluster investment in the past two years has been interactive fitness company Peloton Interactive Inc (NASDAQ:PTON).
Peloton and other so-called stay-at-home stocks experienced a near-best-case scenario when the COVID-19 breakout occurred in early 2020.
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Most gyms and many public spaces people would normally use for workouts were closed, creating booming demand for at-home workout equipment and services. However, vaccine rollouts in early 2021 helped fitness enthusiasts feel confident about safely going back out into the world again.
To make matters worse, Peloton was forced to issue a complete recall of its Tread and Tread+ treadmills in early 2021 due to safety issues with the products. Peloton added insult to injury in August 2021 when the company disclosed internal controls issues that resulted in the company improperly valuing its inventory.
At the beginning of 2020, Peloton shares were trading at $28.98. By the beginning of March, the stock had dropped to $27.20 after news of the virus spreading in China prompted concerns about a U.S. pandemic.
The stock ultimately bottomed at $17.70 on March 16, five days before the S&P 500 hit its pandemic low. Peloton was still trading below its 2019 IPO price of $29 on April 1, 2020, as the market began to recover.
At that point, Peloton shares took off like a rocket, generating particularly massive volume in the second half of 2020. The stock hit $50 in June and $100 in September.
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Peloton In 2022, Beyond: In January 2021, Peloton shares hit a new all-time high of $171.09 just as the vaccine rollout began. Unfortunately, Peloton's growth completely dried up following the pandemic. After multiple rounds of layoffs, Peloton reported a 27.5% drop in revenue and a $1.2 billion net loss in the second quarter of 2022.
The stock pulled back to as low as $6.66 in September 2022 before recovering to around $8.82 today.
Investors who bought Peloton on the day it hit its pandemic low and held on have generated a negative overall return on their investment. In fact, $1,000 in Peloton stock bought on March 16, 2020, would be worth about $396 today.
Looking ahead, analysts are expecting Peloton stock to rebound in the next 12 months. The average price target among the 25 analysts covering the stock is $15, suggesting 67.7% upside from current levels.
Photo: Courtesy of onepeloton.com
