Peloton's Flat Tire

-Peloton is a one-product company because its Tread was a flop and its digital subscription was no better than free workout classes on YouTube.

-Cost - Treadmill recalls have increased per-unit cost by around 10%.

Peloton's profitability wasn't sustainable as it was driven by a short-term reduction in OPEX.

-Peloton's bike concept is no longer new and competition is bound to catch up.

The original hypotheses were valid

-The flop of the Bike+ and Tread shows that users aren't willing to buy another bike when they already have one.

-Gross Margin - Before, their gross profit per bike was around $1000. Now, it's $300. This is because costs went up, and the price went down.

-Revenue Growth - The slowing growth of its subscription customers is driven by the slowing growth of hardware revenue. Bike unit sales have slumped considerably (around 75% YoY) compared to previous growth rates (200-300% YoY).

A year ago, Peloton was one of the biggest winners of the COVID-19 rally. Post-2020, a combination of increased cost and decreased price made Peloton fall just as quickly.