Peloton Interactive Is Unprofitable and Undervalued
Thanks to excellent marketing, Peloton Interactive (NASDAQ: PTON) is one of the hottest brands in fitness right now. The company that wants to sell sweatholics a $2,245 exercise bike (or $4,000+ treadmill) currently has fewer than 600,000 subscribers, but the brand is already known by more than 50 million people who have expressed interest in learning more about its products.
Peloton expects to sell millions of these things, and it probably will, given that sales have been doubling year over year. But one issue many have with the stock is that Peloton is bleeding cash. Its net loss has widened from $71 million to almost $200 million over the last two years. Throw on top of that a rich market cap of more than $8 billion, and it's understandable for some investors to be skeptical about the value in the stock right now.
However, when we dig deeper into the company's numbers, there is potentially a very profitable business hidden underneath Peloton's cost structure. Because of that, the stock could have plenty of upside from current price levels.
Source Fool.com
