Peloton shares rise while gym visits lag

Stay-at-home rules have fitness buffs altering their workout routines.

Peloton Interactive climbed to near all-time highs Tuesday after Evercore ISI analysts said gym-goers are unlikely to return to in-person fitness routines once economies begin to open.

Shares of the interactive exercise company have rallied 71% this year and are up 170% from their March lows as nationwide stay-athome orders forced people to alter workout routines. In May, the company reported third-quarter revenue jumped 66% and raised its outlook for full-year sales and connected-fitness subscribers.

Early data from states including Georgia, Texas, Florida and Ohio that have begun to reopen gyms suggests people remain reluctant to return, even when they are allowed to, according to analysts led by Lee Horowitz.

In states where gyms have opened, total unique desktop visits for popular boutique fitness studios are down 20% to 50% from preCOVID-19 levels, they said.

In mid-May, the stock touched $49.68, the highest since the company went public in September.

Peloton has been able to capitalize on its unique position and recently hosted an All-Star Ride with professional athletes such as golfer Rory McIlroy and Minnesota Vikings tight end Kyle Rudolph to engage customers.

Peloton CEO John Foley recently said that bringing the price of its bike down is a big focus for the company in the coming years. Affordability presents an opportunity for Peloton to grow its scale, which should accelerate the mix shift of revenue and profit toward subscription, Rosenblatt analyst Bernie McTernan wrote.