Connected-fitness company (NASDAQ: PTON) has been attempting to turn itself around since the beginning of 2022. The company made the near-fatal error of assuming that pandemic-era demand for its pricey exercise bikes would persist. It did not. Massive losses ensued.

Under CEO Barry McCarthy, the company has slowed the bleeding. Free cash flow was a loss of just $55.3 million in the third quarter of fiscal 2023, which ended March 31. That's vastly better than a loss of $746.7 million in the prior-year period.

But slowing the bleeding and returning to growth and profitability are two very different things. Under McCarthy, Peloton set a stretch goal of eventually reaching 100 million members. Peloton certainly isn't going to sell 100 million multi-thousand-dollar home exercise bikes, so much of this growth would have to come from subscription offerings not tied to hardware. The problem was that Peloton's brand and marketing put the hardware front and center.

Continue reading

Source Fool.com