In an interview with Cheddar TV, IPO Edge Editor-in-Chief John Jannarone makes the case for a strong upcoming debut for Peloton, the exercise equipment and media company. He argues that the key to the business is its recurring subscription revenue, which accounts for roughly $250 million of the company’s estimated $900 million in sales, according to a pre-IPO investor. With a recent valuation of roughly $8 billion, the company commands a 9x revenue multiple, which may actually be reasonable given the strength of other successful IPOs including Zoom and Beyond Meat. Investors should look at Peloton as a media company akin to Netflix, with an even stickier user base that translates to a very low churn rate.
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