What Happened?
Shares of exercise equipment company Peloton (NASDAQ:PTON) fell 5.8% in the afternoon session as the major indices tumbled after the Trump administration confirmed that the planned 25% tariffs on imports from Canada and Mexico, two of the largest trading partners of the United States, would proceed as planned. The news added to the market's growing unease, which had been building since the start of 2025. For Wall Street analysts, investors, and businesses, the announcement underscored the urgent need to plan ahead and factor the potential downside of the tariffs into their financial forecasts. Key concerns included rising production costs, which are often passed on to consumers, and the risk of inflation, further heightening economic uncertainty.
The shares closed the day at $7.02, down 6.8% from previous close.
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What The Market Is Telling Us
Peloton’s shares are extremely volatile and have had 60 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 25 days ago when the stock gained 17.9% on the news that the company reported strong fourth-quarter results, with EBITDA significantly surpassing Wall Street estimates and guidance for the next quarter coming in well above expectations. Gross margins improved significantly, with Connected Fitness Products gross margin reaching 12.9%, due to a shift toward higher-margin products and lower costs. This margin expansion helped drive the earnings outperformance despite revenue pressures. Overall, this quarter showed that profitability is strong and that the turnaround is in progress.
Peloton is down 20.1% since the beginning of the year, and at $7.06 per share, it is trading 33.3% below its 52-week high of $10.57 from December 2024. Investors who bought $1,000 worth of Peloton’s shares 5 years ago would now be looking at an investment worth $264.38.
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