Investing On Trends, and Building Moats To Protect Castles
A company, Peloton, makes home exercise bikes, and in a period when everyone was hibernating, it saw massive sales. For that trajectory, investors have rewarded the company with more than 15% positive shift in the stock market. But what happens when the lockdown is over? Would the Covid-19 pandemic create a sustainable growth model with leverageable factors that can help Peloton build a moat to protect its castle against the likes of LA Fitness and other out-of-home fitness outfits? In this piece, Progress examines what it means to invest on Trends and the implications.
Peloton Interactive Inc. is having trouble keeping up with the rush of demand for its exercise bikes amid the COVID-19 epidemic and analysts are optimistic that the company could keep seeing big benefits even after the worst of the crisis is over.
The stock PTON, +16.01% is up more than 15% in Thursday trading following the company’s latest earnings report and it’s on pace for its largest single-day percentage gain on record. Peloton saw “a significant increase in demand” for its spin bike in the final weeks of the March quarter, to the point where the company now has an extended backlog because it can’t fill orders quickly enough.
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