Shares of Peloton (PTON 5.21%) jumped as much as 11.5% in early trading on Monday as investors bid up riskier stocks in the market overall. Shares had given up some of those gains and were up 4.9% at 11:45 a.m. ET.
Peloton’s big steps forward
The company’s stock performance has been nothing to write home about recently, as you can see in the chart below. However, the business has been making steady steps forward in building out a more sustainable model.
In 2023, the company pivoted to an app-first subscription model, moving away from being hardware-centric. Partnerships with Lululemon and TikTok were recent steps to distribute that content to a wider audience.
Last week, YouTube TV was rolled out on Peloton devices, allowing users to watch TV while working out. Now, YouTube TV, Netflix, Disney+, and NBA League Pass are available on Peloton devices, opening up content options for hardware owners.
These are incremental changes, but every step to differentiate from the competition is good for Peloton’s market position long term.
What to watch at Peloton
Adding content like YouTube TV is an incremental positive for Peloton and makes the company’s hardware more valuable to owners and subscribers. The question now is if that will translate to improved subscriber numbers.
Investors will learn more about the company’s progress when the fiscal second quarter of 2024 results are released in February. Still, it may be a few quarters before the company sees a financial turnaround that could be a long-term catalyst for the stock.
Travis Hoium has positions in Peloton Interactive and Walt Disney. The Motley Fool has positions in and recommends Lululemon Athletica, Netflix, Peloton Interactive, and Walt Disney. The Motley Fool has a disclosure policy.
