A Peloton stationary bike at one of the company’s showrooms.
Peloton Interactive shares had already lost roughly 75% of their value this year, when analysts at JMP Securities decided to downgrade the stock on Friday.
The ratings cut to Market Perform from Market Outperform helped send Peloton (ticker: PTON) down another 3.8% on Friday, giving the stock a total 2021 loss of 76.4%. The stock closed the day at $35.76, near its May 2020 level.
In his downgrade note, JMP analyst Andrew Boone said the company had benefited from reaction to the pandemic, but global success fighting the disease was now weighing on the company’s prospects.
“With COVID-19 having pulled forward demand, we believe Peloton is now having to sell into people who are less emphatic about fitness and are likely harder to convert, leading to less-efficient marketing spend,” Boone wrote.
The company didn’t immediately respond to a request for comment about Friday’s downgrade.
Peloton sells stationery bicycles priced at $1,500 and upward, as well as subscriptions to fitness classes.
The stock soared more than 400% in 2020, as Covid-19 lockdowns pushed people toward at-home workouts.
A number of missteps marked the company’s two boom and bust years, including a recall following a child’s death linked to a device, and a negative product placement in a recent spinoff of the Sex and the City television series.
Consumer groups slammed Peloton earlier this year after resisting calls to recall its treadmill product, before ultimately agreeing to recall the device. The Consumer Product Safety Commission had linked a Peloton treadmill to the death of a child, according to the company’s SEC filings.
Regarding the Sex and the City spinoff, Peloton said producers hadn’t told the company a character would die after a ride on one of its stationary bicycles.
Most crucially, analysts said, Peloton failed to account for the degree to which its fates were tied to the pandemic. The company has had to slash the price of indoor bikes, while implement a hiring freeze amid projected first-quarter losses of $376 million.
“Peloton offers best-in-class hardware and digital content and has growth drivers in new products (including the Tread) and international expansion,” Boone wrote Friday. But, “with our estimates now below consensus as U.S. Bike sales slow, we are stepping to the sidelines.”