Peloton's stock is rising despite global stock markets plunging this week as the coronavirus outbreak becomes a growing concern.
According to Needham analyst Laura Martin, investors could see more value in the company as the outbreak spreads and more consumers are encouraged to work out at home while avoiding public spaces such as gyms and fitness studios.
"This may drive higher unit sales and subscription revenue in 2020," Martin said in a recent note to investors.
Stock markets around the world have tumbled this week as the spread of coronavirus becomes of growing concern and new cases are reported in Iran, Italy, and South Korea.
There are a select few stocks that seem to be rising in this uncertain time, however, one of which is the high-tech, at-home fitness company Peloton, best known for its $2,000 exercise bike.
According to Needham analyst Laura Martin, the company could be in a position to benefit from the coronavirus crisis as consumers choose to work out at home rather than risk going to a gym or fitness studio. Investors may be seeing value in this.
"With new COVID-19 hotspots in South Korea, Italy and Iran, we believe certain US consumers will be less comfortable over time going to their gym and more likely to order a PTON [Peloton] bike to stay home. This may drive higher unit sales and subscription revenue in 2020 than are currently in our estimates," Martin wrote in a recent note to clients, as reported by Yahoo Finance.
Gyms in China have already been forced to livestream their classes as consumers are forced to stay away from public places.
"We don't want our clients to forget us. And if we are not doing anything, some might be afraid that we were already gone. We are trying to do something to comfort everyone," Chris Li, the owner of Pilates Proworks in Shanghai, recently told Reuters.
And it's likely that as the virus spreads, consumers elsewhere will also become cautious.
"In my opinion it is one of the more densely crowded areas. I've also stopped using public transport and where possible I'm driving," she said.
Peloton, meanwhile, gives customers the ability to participate in boutique-style fitness classes without having to worry about being in a public space.
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