Here is my best stock to buy in September
The convergence of some hot and unmistakable trends, the allure of a sticky market leader crushing the high end of its niche, and the high likelihood of another exploding earnings report in just a week’s time make Interactive Platoon (NASDAQ: PTON) my best stock to buy in the coming month.
Peloton has become the premium platform of choice for interactive treadmill and stationary bike workouts. The company’s levels of growth and engagement are impressive – and the fact that it’s often criticized or used as a hitting line by comedians only underscores its status as a rising star of the new recovery movement. home form. Peloton’s stock – like its gear – may seem expensive, but the premium is well worth it on both fronts.
Step by step
Owning a Platoon isn’t for the weak in your wallet, but the math makes sense to a lot of people once you’ve broken it all down. Bikes start at $ 2,245 and treadmills start at $ 4,295 or more. Then there is the monthly membership fee of $ 39. That’s a lot of money, but most high-end gyms charge a lot more than $ 39 per month per member, and anyone in a household can use the Peloton. The cost of the material can also be financed over 39 months. For comparison, Flywheel and SoulCycle – two of the more well-known in-store spinning class chains – charge around $ 600 and $ 864 per month, respectively, for a couple who participate in three sessions per week. Unlimited memberships would run you even more.
Who would pay a few thousand up front for an engaging platform that has all the bells and whistles of an interactive gym workout without the crowds, attitudes, or the increased risk of virus exposure? By the close of its fiscal third quarter, which ended on March 31, Peloton had 886,100 connected fitness subscribers – up 94% year over year. There are a total of 2.6 individual members on the platform.
Those bikes and treadmills are put to work after people make their initial investments, and in the current climate, it’s no surprise that the company’s churn rate is at its lowest in four years. Usage was at an all-time high at the end of March, with members doing an average of 17.7 workouts per month, up from 13.9 workouts per month in March 2019. Suddenly, so did the value proposition of owning equipment. expensive compared to paying for a 12-month Flywheel or SoulCycle subscription session starts to make even more sense.
It’s hard to find Peloton owners who complain about the experience. Everything from the in-home installation included with the purchase, to live and on-demand sessions that feature leaderboards and video calls, fosters a sense of community that allows the business to generate significant network effort. Peloton does a good job with their marketing, but nearly half of all purchases are driven by word of mouth, as satisfied owners tell friends and family how much they love the machines and experience.
it sweats better
The pandemic has made gyms and fitness centers risky places to bring in your reps, and have you tried wearing a mask while running or pedaling? However, it’s not just the initial coronavirus-related boost to Peloton that is worth noting here.
The country is also seeing a sharp increase in the number of people moving from cities to suburbs. As businesses no longer require people to visit their offices in big cities, and families feel both the dangers and the claustrophobia of cramped multi-family residential buildings, dense metropolitan areas lose their appeal.
People may be starting to realize that they can get more for their money living just outside of bustling cities, but for city dwellers who have access to a fitness center in their apartment building or who live within walking distance of an upscale spin class or gym, moving to a house in the suburbs probably means losing that. Platoon wins on all points in the suburban trend – these houses provide more space for stationary bikes or treadmills, and increase the incentive to replace one type of convenience with another.
Peloton is reporting new financial data after the September 10 close, and there is reason to be excited. The company’s forecast is for revenue of between $ 500 million and $ 525 million for its fiscal fourth quarter, which would represent growth of 128% midway through. He should achieve – and probably beat – that goal. Peloton has established itself as one of the hottest of this year growth stocks, but training is only just beginning, which is why this is my best stock to buy in September.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.