Peloton Interactive ( NASDAQ:PTON ) was the ultimate "stay-at-home" stock in 2020, as more people rushed to buy at-home fitness equipment to stay active. But the return to normal routines has caused some confusion about Peloton's growth trajectory. The stock has acted like it's in a pinball machine, bouncing all over the place. After soaring to a high of $171 in early 2021, the share price has sunk all the way to around $31 at the moment. Should investors buy, sell, or hold? With the share price approaching the $30 level, the valuation is starting to look very tempting. After all, low valuations can set the stage for market-beating returns, as they did when Peloton was trading around this same level two years ago. Here's why it's time to take a second look at Peloton. Image source: Peloton Interactive. The opportunity is still there Peloton's stock price and revenue growth went parabolic in calendar 2020, but that is long gone. The company may never see those … [Read more...] about Buy, Sell, or Hold Peloton Stock at $31 a Share?
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Duolingo ( NASDAQ:DUOL ) , an education company which provides online classes in 40 languages, had its initial public offering on July 28 at $102 per share. The stock opened at $141.40 and now trades in the $120s. Bulls were impressed by Duolingo's robust growth in users and revenue, but bears balked at its decelerating growth, lack of profits, and frothy valuations. The bears have also expressed concerns about the app's recent ban in China, early sales of vested shares, and a post-pandemic slowdown. Should investors chase Duolingo's post-IPO rally? Or should they wait to see a few more earnings reports before making a decision? Image source: Duolingo. How does Duolingo make money? Duolingo offers its online courses through its mobile app and website. It operates a freemium model: It monetizes free users with ads, while paid subscribers gain an ad-free experience with additional perks. It offers one-month, six-month, and 12-month membership plans. The one-month … [Read more...] about Is Duolingo Stock a Buy?
There is much discussion online, and also in small, private groups, about why the prices of technology companies--public and private--are falling. Valuing any company can be difficult, because it requires a degree of forecasting future growth and competition and ultimately the profits of the organization. And there have been two big changes that are widely known--in the past quarter, the value of some very high profile companies, such as LinkedIn and Twitter, have fallen substantially, plus Fidelity (usually a public market investor) has written down the value of many of its later-stage private-company investments and made the downward valuations known. Most venture capitalists who have been in this business for a long time foresaw this correction and have been talking about it privately for the better part of the past year or two. I'd like to explain as best I can my opinion on what is going on, because most of what I hear from entrepreneurs is not only wrong but is … [Read more...] about What Most People Don’t Understand About How Startups Are Valued
Last year was a difficult one for connected-fitness business Peloton Interactive ( NASDAQ:PTON ) . After skyrocketing 434% in 2020, when pandemic lockdown orders led to surging demand, the stock tanked 76% in 2021. Fulfillment delays, safety issues, and the economic reopening all contributed to Peloton's demise. At a price-to-sales ratio of 2.5 today, the lowest since the company became public, is Peloton a buy ? Let's dive in and find out. Image source: Getty Images. Why Peloton is a buy If we isolate Peloton's subscription business, which generated $1 billion in revenue over the trailing 12-month period, then Peloton's stock currently trades at 10 times sales. For a fast-growing, high-margin, recurring-revenue business like this that has a competitive advantage in the form of a powerful brand and massive data collection, that's a very appealing valuation. Apple is making a big push in this area with its Fitness+ offering, but … [Read more...] about Is Peloton a Buy After Falling 76% in 2021?