0100200300400500%SEPT. 26, 2019 JAN. 25, 2021STOCK PRICE GROWTH 510.0%0100200300400500600$700 million2018 2019 2020PELOTON QUARTERLY REVENUES
Q3 2020
$757.9 M.QUARTERLY PROFITS Q3 2020
$69.3 M.NOTE: DATA DISPLAYED AS CALENDAR YEAR. PELOTON FISCAL YEAR ENDED JUNE 30, 2020. SOURCES: S&P GLOBAL; BLOOMBERG-60-40-200204060$80 million2018 2019 202030 FORTUNE FEBRUARY/MARCH 2021
IT HAS LONG BEEN OUR THESIS THAT FITNESSIS MOVING TO THE HOME.
JILL WOODWORTH, PELOTON’S CHIEF FINANCIAL OFFICERto reopen, which could temper the
home workout craze. Meanwhile,
drafting off Peloton’s lead, a host
of competitors, from Apple to
NordicTrack-maker Icon Health &
Fitness, are muscling into the market.
It’s a pivotal moment for Peloton to
prove it’s got momentum, that it can
be more than just a stay-at-home fad.
In 2014, a couple of years after
Peloton’s founding, Foley and Tom
Cortese, Peloton’s cofounder and
chief operating officer, set up shop
in a mall in Short Hills, N.J. Situ-
ated near an Apple store and a Tesla
dealership, the two hoped to tap
those brands’ high-end allure while
enticing passersby.
The Tesla connection would proveprescient. Both compa-
nies started with pricey,
premium hardware and an
ambition to reach main-
stream customers. The
fortunes of both businesses
soared during the pan-
demic as poster children of
a tech rally reminiscent of
the dotcom craze.
The math of Peloton’s
valuation—it has a market
capitalization of $46 bil-
lion—is difficult to justify
unless one believes the
company will become
a tech-media titan. Jay
Hoag, a venture capitalist
with TCV who joined Pelo-ton’s board after leading
a funding round in 2018,
should know. An early in-
vestor and longtime direc-
tor of Netflix, he compares
Foley’s ambitions to those
of Netflix CEO Reed Hast-
ings. Many peers wrote off
these founders as “crazy,”
but Hoag believed in their
vision, feeling “there was
something magical about
all of it,” he says.
Not everyone is en-
chanted. Simeon Siegel,
an analyst at BMO Capital
Markets, is Peloton’s iciest
bear. “Humanity, by na-
ture, is lazy,” he says. Siegel
argues that Peloton’s
market opportunity is lim-
ited: Most people prefer
to plant butts on couches
than glutes in saddles.
Merciless in his appraisal,
Siegel says Peloton’s stock
is “detached from reality”PEDAL TO THE METAL
In just a few years, Peloton has built an exercise empire, and the pandemic has only helped to accelerate its sales and profits.
Wall Street has taken notice, sending the company’s shares surging despite misgivings from some analysts.