Here's Why You Shouldn't Bet Against Peloton
The ongoing coronavirus pandemic has forced investors to reassess their investment philosophies. There has never been a better time to add high-quality names to your portfolio that have done well during this crisis. Trends that we've already seen in place, such as working out at home, have now accelerated due to shelter-at-home orders.
A big beneficiary is Peloton Interactive (NASDAQ: PTON), whose 2.6 million members helped generate sales of $525 million in the quarter ended March 31, 2020, representing 66% growth year over year. While the company has impressive gross margins of nearly 47%, it has yet to turn a profit. In fact, net losses in the most recent quarter widened to $56 million. Let's dive into how investors should interpret this.
Peloton's lack of earnings hasn't prevented the stock from rising an incredible 149% since its IPO last September. Since mid-March, when fears and uncertainty regarding COVID-19 were at their highest, the stock has more than tripled. So is Peloton stock overvalued at current levels, and should investors consider shorting the stock?
Source Fool.com
