During the height of the COVID-19 pandemic, Peloton (PTON) could seemingly do no wrong. Following an eyebrow-raising commercial that became a pop culture meme, the home exercise bike manufacturer enjoyed blistering demand as the public health crisis forced virtually everyone to quarantine. With only limited social activities available, many consumers turned to Peloton to stay fit. Naturally, PTON stock blossomed.
However, the problem was that shares peaked around December 2020. Throughout the following year, PTON stock struggled to maintain traction. Unfortunately, booming inflation forced the Federal Reserve to implement an aggressively hawkish monetary policy. In turn, the rise in the benchmark interest rate saw Peloton stumble badly in 2022. At the same time, social normalization trends accelerated, meaning that consumers had more and cheaper fitness options.
