Peloton falls 7% after the bike maker mentioned it was struggling to maintain up with hovering demand for its flagship health merchandise

  • Peloton’s shares fell 7% on Friday following the release of earnings for the second quarter.
  • The bicycle maker said it would invest $ 100 million to accelerate the pace of product shipments around the world.
  • Wedbush kept its outperformance rating on Peloton as analysts believe the home fitness trend will continue.
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Peloton fell 7% on Friday after the company continued to struggle to deliver its bike and treadmill products on time.

The company reported its first billion dollar quarter on Thursday, helped by a boom in demand for fitness products during the holiday season. In the past year, Peloton’s customers have complained about long waiting times, delivery delays and short-term cancellations.

Production delays weren’t the only delivery challenge. The shortage of containers, prolonged delays in the port and a backlog in unloading containers were other problems for the company, CFO Jill Woodworth told the Financial Times.

Pandemic factors continue to affect business. As a result, Peloton has now invested $ 100 million to accelerate the pace of air and ocean freight and to extend the “longer-than-acceptable waiting times” over the next six months.

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“While this investment will dampen our near-term profitability, improving our member experience is our number one priority,” said Peloton.

The company now expects full-year revenues of more than $ 4 billion after an earlier outlook of over $ 3.9 billion. Wedbush raised its 12-month price target for Peloton from $ 160 to $ 162 while maintaining an “outperform” rating.

This is because analysts say the company is unimpressed with the dynamism of COVID-19 activity as there is a cheap move away from traditional gyms to fitness at home.

Peloton’s stock closed at $ 157.53 on Thursday but was lower, trading at $ 146 during Friday’s regular trading.

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