I was real close to selling out of PTON. It is a great company. We’ve seen some amazing numbers (I won’t paste them here, just glance at the investor relations shareholder newsletter that came with the earnings release: https://investor.onepeloton.com/static-files/dd43f8b8-acc9-4…). I’m just not in love with the widget-selling, or fitness industry in general, so I was going to bow out and put the money to work elsewhere, BUT…I saw this 8 min interview with the company President on Yahoo finance that was really good: https://www.youtube.com/watch?v=GiO2xiR0qmU, which lead to some more reading. Here are some notes:
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Something big coming in “strength” - See 6:35 in to the video above. There is something big coming here and I think this is a great area for them to be expanding in to.
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Manufacturing no longer a major concern. 2 new factories in Taiwan in the last 2 months. In a good place. Expected to get better in to the spring.
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Shipping is now the bottle neck, but it isn’t on their side. If it wasn’t for the congestion at ports, shipping wouldn’t be a problem. So they spent $100M to do the right thing and avoid a compounding delay to keep customers happy. Their president said, “We’re not victims here…”, meaning they are taking action, not just complaining about the state of things.
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Lots of earnings backlogged. They don’t show revenue until the customer gets the product. This is the glass-half-full side of the manufacturing delays. It should help with numbers a little bit over the next quarter as they spend less on shipping and get to log some backlogged earnings. Might help.
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Tread rollout continues. Old Tread Plus already in US then launched the new lower cost Tread platform in the UK late last year; orders surged, great demand and customer reviews. Launching in Canada this week(!), along with a few US zip codes. This new lower cost Tread launch in the US has been pushed back to late-May. (https://www.pcmag.com/news/us-launch-of-new-peloton-tread-pu…)
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The price got beaten down after the pre-earnings pop. This isn’t huge but it went up around 7% and has come down from there around 12% (roughly…it is just back to roughly the low side of where it was before). This just feels like a nice coiled spring to me. This is something I still take from years around TMF. A good company on a dip, or even flat for a bit, is just something I can’t ignore. It isn’t THE reason. It is just another factor causing me to sit on my hands. It just “feels” like a good price, but please don’t read much in to this one.
I’m probably going to hold on for another quarter or two and see how this all plays out. At about 7% of my portfolio, it is, currently, my smallest position.