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Analyst on Peloton: 'I don't know who would buy them'

Peloton (PTON) went from boom to bust seemingly overnight, and as buyout rumors swirl, one analyst is skeptical the beleaguered home fitness company could sell even if it wanted to.

“I don't know who would buy them, right?" New Constructs CEO David Trainer told Yahoo Finance (video above). "I mean, do you think anyone who's using Peloton doesn't already have an Amazon subscription or buys Nike stuff? I don't really know where the value add is.”

Speculation that Peloton would look to sell the business has dogged the company in the last year, especially after agitation from activist investors, a leadership shake-up, and cost-cutting measures. CEO Barry McCarthy has disputed these rumors, telling Yahoo Finance in March he plans to revive the company, not sell it.

Peloton sinking

At the height of the pandemic, Peloton's business soared as closed gyms forced people to use home equipment. But as things started to open up, gyms made a comeback while Peloton started to lose ground.

The stock has been on a downward spiral ever since. Shares hit a record low on Thursday and are down 80% this year.

In its recent fourth-quarter earnings, the company posted an operating loss of $1.2 billion with $415 million of those losses tied to restructuring charges. And earlier this month, the executive chairman and co-founder John Foley stepped down as part of the leadership shake-up causing more turbulence for the business.

Netflix and Spotify veteran Barry McCarthy took over as CEO from Foley in February this year during the middle of massive layoffs and other cost-cutting efforts. McCarthy has been trying to reinvigorate the ailing business and increase subscription revenue growth.

AUGUST 13th 2022: Peloton announces plans to cut jobs, increase prices and close a significant number of retail showroom stores in an effort to turn a profit. - JANUARY 20th 2022: Peloton stock plunges 24% after report of production halt - dropping shares below the Initial Public Offering (IPO) price for the first time in two years. - File Photo by: zz/STRF/STAR MAX/IPx 2020 9/22/20 Peloton offices on September 22, 2020 in Manhattan, New York City. (NYC)
Peloton offices on September 22, 2020 in Manhattan, New York City. (zz/STRF/STAR MAX/IPx 2020/ AP) (zz/STRF/STAR MAX/IPx)

On Thursday, Peloton announced it would lean on America’s largest sporting goods store, Dick’s Sporting Goods (DKS), in order to boost sales. Peloton's hardware products including the original Bike, Bike+, Tread, and Guide as well as some select accessories will be available at branded fitness shops inside more than 100 of Dick's 700 retail locations as well as on its online store. The companies haven't announced a launch date, according to the press release.

The move marks Peloton’s first brick-and-mortar partnership outside of its namesake stores and comes after Peloton inked another wholesale deal to sell its products through Amazon (AMZN).

But that might not be enough to convince analysts watching the growth of the stock stall.

"We're not talking about some new workforce automation technology or robots, right?" Trainer said. "It's workout products. And it's priced as if it's going to continually grow and achieve much better margins than it's ever achieved. And we just don't see it. We don't see a path to that at this point in time."

“They can't survive much longer without drastically changing the business model or getting new financing, which, in the current environment, is going to be very difficult,” Trainer added.

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

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