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No. of Recommendations: 23
I think I need to clarify some things:

1. I do not think that Peloton done growing! As has been pointed out, they've got new products coming, and the current products are selling like crazy. In fact, they're going to have their biggest quarter ever in December with revenue over $1 billion! Then for the fiscal year ending in June 2021, annual revenue will be over $4 billion! Here's my challenge: What do you think revenue will be for the fiscal year that spans July 2021 through June 2022? None of us can offer a very good guess, I don't think. That was the entire point of my first post. Since we can't do that, we shouldn't be overconfident in PTON.

2. There actually were a few cracks this quarter. The supply issues, the sequential drop in EPS although revenue was way up, heck even a thing as minute as the drop in workouts per connected user. (It was actually down from last quarter, Dave.) Anyway, none of these things are death, but the problem is that my baseline confidence is lower for this company than for a SaaS company, so it is more easily shaken.

3. I said in my original post that not all businesses have to be SaaS. That's true. Software companies can have troubles too, of course. But on the whole, SaaS has been the most predictable business model I've ever seen. And with more upside than the market has been able to price in heretofore.

4. Most of this is just experience talking. I don't know what the valuation "should" be. I don't know how much growth will slow or when. PTON might keep right on growing through fiscal 2022 and beyond...but just a slower growth rate might be enough for the stock to go nowhere, a potentially huge opportunity cost when you could invest in other things that are going up. Experience tells me to plead ignorance and preach caution. Personally I think the low hanging fruit has been plucked, and I may be wrong by a lot, but I'd rather be early than late on this one.

All this is a reaction to seeing how much confidence some are placing in PTON. Experience just tells me that this one isn't going to be very predictable. For me, that means it will be a small position if I keep it.


PS - If anyone else responds, I'd appreciate if you answer my challenge in #1. It's not that I don't foresee growth for fiscal 2022. It's that I don't think we can predict how much.
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