Over the next two years I think you’re discounting:
1. New products: They have a treadmill that is coming at a lower price point next year. Plus rowing machines and other nice products are on the drawing boards.
2. Upgrade cycle: My wife is already looking at the new model and wants to upgrade. She views it as a car payment and will just extend out her contract for the new system and keep paying the monthly fee.
3. Low penetration rate: This one is probably the best argument for growth in the near term (1 to 2 years). They still have a huge market opportunity in both the US and internationally. Germany is the only non-English market they currently support. They can expand this initiative to Switzerland, and Austria easily where it is cold and fitness is popular.
4. Pandemic is accelerating: There is no sign is the crisis slowing. Infection rates are at an all-time high around the world. Exercise at a gym or fitness club is not an option for most for at least a year. Many gyms are still going to fail (sad). This will reduce the options available in the market as a whole.
I would add apparel as an area of possible expansion:
https://www.wsj.com/articles/how-peloton-could-beat-nike-and…
PTON’s building a brand with increasing market opportunities.
Dave