Are Peloton (PTON) Stock Investors Happy, or Did They Miss Out?

Peloton Interactive (NASDAQ: PTON) is a prime example of a stock that looked like the next big thing before it flopped.

It went public at the end of 2019, just before a global pandemic kept people out of the gym, and sales skyrocketed. But when gyms opened and demand waned, Peloton scrambled to downsize from all of the building it had done to meet rising demand.

It's still recovering from the aftermath, and its stock has reflected this journey over the past few years.

Image source: Peloton.

What's happening at Peloton

Peloton is known for its connected fitness equipment and subscriptions. It made a name for itself as a premium exercise company, and was well positioned for success when fitness enthusiasts needed new options under lockdown orders.

However, that did not continue post-lockdowns. People went back to the gym, and demand dried up. The company has since been trying many different tactics to reignite interest and sales, from forging partnerships with wellness centers and corporations to acquiring other companies to offering rentals, and several others. However, sales are still declining. In the 2026 fiscal first quarter (ended Sept. 30), sales were down 6% from last year.

Softer metrics have also been disappointing. Members were down 2% from last year in the quarter, as were paid connected fitness subscriptions.

One area where the company has improved is cost-cutting and profitability. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 2% from last year in the quarter, and net income was $14 million.

The company has cycled through several CEOs over the past few years, and current CEO Peter Stern has unveiled a growth strategy with a new line of equipment, including artificial intelligence (AI)-powered products and services that can customize routines and help users work out better.

Peloton stock continues to fall

If you'd bought and sold at the right time, you might have made money on an investment in Peloton stock. However, for much of its time on the market, Peloton stock has underperformed the S&P 500.

Data source: Ycharts data as of Nov. 25.

You might have said that Peloton's debut on the stock market right before the pandemic was fortuitous, but at this point, it's clear that it didn't really help the company. Instead of a more natural progression, Peloton grew too quickly for management to handle, and it's still figuring out a way forward.

I'm not convinced that investors should give up on Peloton altogether, but I'm also not convinced that now is the right time to buy. Peloton is still in the figuring-it-out stage, and investors should probably wait until there's more definitive progress before deciding that Peloton stock is a solid long-term investment.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Peloton Interactive. The Motley Fool has a disclosure policy.