The Peloton (NASDAQ: PTON) stock price has been in a continuous bearish trend lately with worries about the company’s future. It fell to $23.87, slightly shy above its lowest of $19.70 and 86% below its highest, bringing a $7.9 billion market cap.
Peloton strategy shift
Peloton was one of the best performers since more people opted for at-home exercises during the pandemic. Hence the Peloton stock price jumped to its highest, hiking the total cap to over $30 billion.
However, the pandemic caused the company to make new mistakes. The company boosted its inventories with growing demands, but it was left with thousands of bikes and treadmills with slow growth.
Currently, the company is modifying its business model to concentrate on subscriptions. It announced that it would drop bike prices to $1,440 inclusive of the delivery fee, a discount from its initial selling price of $1,745.
Moreover, the company announced an increase in subscription price from $39 to $44, including more metrics and on-demand classes. Also, the mass-focused package remained at $12.95
The news came after Blackwell’s capital urged the firm to consider strategic options like a sale. It contended the firm’s changes since the CEO appointment.
While these changes are welcome, they present substantial risks to the company. For one, a $44 monthly subscription is not cheap, which means that there will be churn. Also, the pricing risks turning off potential customers. For example, a Mirror subscription package is $39.
Although these are good adjustments, they are significant risks to the company. Firstly, $44 for signing up isn’t affordable; thus, a churn is possible, and it may turn off potential customers. For instance, a mirror subscription package is $39.
Peloton stock price forecast
The daily chart shows that the PTON stock price has been in a strong downward trend in the past few months. The stock has moved below the 25-day and 50-day moving averages. A closer look shows that it is sitting near its all-time low while its volatility has eased.
Therefore, there is a likelihood that the Peloton stock price will keep falling as bears target the next key support level at $20. A climb above $30 will invalidate the bearish view.