By Sam Boughedda
JMP Securities analysts told investors in a note on Tuesday that Peloton (NASDAQ:PTON) is seeing strong Amazon (NASDAQ:AMZN) sales, and its category positioning is strengthening.
The analysts explained that with Amazon now showing the number of recent sales in search results, they analyzed the top 50 best-selling exercise bikes on Amazon and believe Peloton, with its 600+ bike sales over the last month, represents 1% of unit sales but 19% of sales revenue for the category.
"While we acknowledge that this is a rough estimate—Amazon gives sales data in 100 unit allotments and we only analyzed the top 50 listed exercise bikes—it reiterates our view that Peloton's category position is strengthening coming out of COVID as we continue to view Peloton as offering a best-in-class customer experience and hardware product," the analysts wrote.
They added that while Peloton represents 1% of Amazon's 50 best-selling exercise bikes on a unit basis, it has a 19% share of sales revenue. In addition, Peloton has a 50% or more share of units and sales revenue for connected fitness products.
"We analyzed SimilarWeb website traffic for Peloton, Hydrow, Nordic Track, Mirror, and Tonal, and found that Peloton had 73% share of visits to connected fitness websites month-to-date for March per SimilarWeb," they said. "We note this group's aggregated traffic fell 39% Y/Y in February, though Peloton visits were down 18% Y/Y. We believe other Connected Fitness businesses are pulling back on ad spend given the funding environment, contributing to Peloton's share gains"
JMP Securities maintained a Market Perform rating on Peloton as the firm awaits more certainty that the category has stabilized.