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Peloton's new rower can compete 'with all major boot camp fitness studios,' analyst says

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Peloton (PTON) is gearing up for a major addition to its home exercise offerings with its new rowing machine.

The on-demand fitness company revealed its long-awaited rower during the company's annual Homecoming 2022 event. According to one analyst, the rower could give the company a "competitive" advantage.

"The rower makes Peloton competitive with all major boot camp fitness studios," Andrew Boone, equity research analyst at JMP Securities, wrote in a note on Monday.

"Combining cardio and strength - Peloton is excited to add this total body workout into its powerhouse arsenal of content and grow its connected fitness portfolio with even more options for engaging and challenging workout experiences," Peloton said in its blog post.

The Peloton rower was unveiled at the company's 2022 Homecoming event.(Photo by Peloton)
The Peloton rower was unveiled at the company's 2022 Homecoming event. (Photo by Peloton)

There are just a few small players — Echelon and Hydrow — that lead the connected rower market. But Peloton may be aiming to take on the larger market of in-person boutique classes with its combination of products.

"Given Peloton’s focus on strength, we expect Peloton’s rowing experience to be a boot camp–style workout," Boone wrote. "Stepping back, this would allow Peloton to offer boot camp experiences across the Bike, Tread, and now Rower, making Peloton a viable option compared to major boutique fitness classes—Barry’s (private) with the Tread, OrangeTheory (private) with the Rower, and Soul Cycle (private) with the Bike."

A screenshot of a video showing an Orange Theory workout class. (Orange Theory)
A screenshot of a video showing an Orange Theory workout class. (Orange Theory)

According to Boone, OrangeTheory particularly underscores the growing market Peloton hopes to tap. OrangeTheory, "which mixes strength, rowing, and running," surpassed $1 billion of revenue in 2018 and had over 1,000 plus studios globally with over 500 more in development at the beginning of 2019, he wrote, "highlighting the significant opportunity by offering boot camps and rowing."

Peloton rower a 'cross-sale opportunity'

Peloton's new rower comes after the embattled fitness company reported $964.3 million in revenue in its fiscal third-quarter earnings, missing consensus estimates of $971.6 million.

The rower's unveiling has been the subject of much speculation. Reports of a Peloton rower machine began circulating in 2018 by Bloomberg. And earlier this year, as the company fought declining demand, the Financial Times reported that the fitness company was working on adding two new products to its lineup, including the rower. At that time, FT reported that the machine would give feedback on the user's form and that users will be able to take classes taught by instructors both in the studio and on the water.

Peloton didn't announce the official name of the new machine and hasn't said when it'll be available, other than saying that it's "coming soon." Furthermore, there is no indication of how much the rower will cost. Peloton's other connected fitness machines — the Bike, Bike Plus, and the Tread — range from around $1,200 to $2,400.

WILLIAMSTOWN, NEW JERSEY - MAY 24: Liza Lecher works out on her Peloton Tread+ treadmill on May 24, 2021 in Williamstown, New Jersey. Earlier this month, Peloton recalled its Tread and Tread+ treadmills due to multiple injuries and the death of a child, after initially resisting a U.S. safety agency’s warning about the machines. (Photo by Michael Loccisano/Getty Images)
Liza Lecher works out on her Peloton Tread+ treadmill on May 24, 2021 in Williamstown, New Jersey. (Photo by Michael Loccisano/Getty Images)

Boone noted that the rower may appeal to existing Peloton subscribers and called the rowing machine a "cross-sale opportunity."

"With 50% of tread units going to existing Peloton subscriber households and the company not marketing the guide outside of free channels (like emails to existing subscribers), we expect the Rower to be more of a cross-sale opportunity rather than a significant new onramp for customer growth," he wrote.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

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