Will Peloton's Big Move Make the Stock Double?
Recently, connected-fitness company Peloton Interactive (NASDAQ: PTON) shocked Wall Street with a surprise $420 million acquisition of fellow fitness company Precor. The acquisition was Peloton's largest, sending investors rushing to gobble up shares and analysts scrambling to adjust price targets.
With acquisitions, there's a lot that can go wrong. Companies can overpay for their target, leading to future writedown charges. Companies can also fail to merge operations efficiently. Because of things like this, it's good for investors to patiently wait to see how things start playing out before getting too excited. That said, I believe Peloton's acquisition of Precor can help its business in two ways, possibly giving the stock significant long-term upside.
Image source: Peloton Interactive.
Source Fool.com
