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No. of Recommendations: 21
As others have noted, a low GM is not strictly a bad thing if the growth is there to compensate for it. But one thing that I haven't seen pointed out with overall gross margin is that it would be a TERRIBLE sign for this company if GM is projected to climb

They disclose that hardware segment GM is 39%, and subscription segment GM is 59%. If GM climbs it means subscription is becoming a bigger part of the business. Well that sounds dandy right? It's exactly what we're looking for from our companies correct?

But this would be a sign that demand is tailoring off! The subscription count is a lagging indicator of user demand, especially with the current backlog. If anything, as an investor you'd want overall GM to stick as close to the hardware segment as possible for as long as possible.

Subscriptions are almost guaranteed to follow hardware ownership count, after all, you wouldn't pay $2000-$5000 for a Peloton without signing up for the "gym membership" portion of the product. And as mentioned several times in the thread already, even evaluating solely on the subscription portion of the company, the current market price seems fair.
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