10 Best US Stocks to Buy Under $10

4. Peloton Interactive Inc. (NASDAQ:PTON)

Share Price as of October 16: $5.21

Number of Hedge Fund Holders: 38

Peloton Interactive Inc. (NASDAQ:PTON) is a fitness company that offers interactive fitness equipment and subscription-based fitness classes. Products include stationary bikes, treadmills, and rowing machines, which are equipped with screens that allow users to stream live and on-demand fitness classes. It also offers a subscription service that gives members access to a wide variety of fitness classes, including yoga, Pilates, cycling, and running.

It launched a half-marathon training program in June and recently partnered with Truemed to allow customers to use HSA/FSA dollars for equipment purchases. This partnership makes fitness more affordable by providing tax-free payment options. Truemed is devoted to educating consumers about the importance of preventative health. The company is also making progress on key strategic priorities, including improving profitability, investing in innovation, and exploring capital allocation strategies. It aims to deliver stronger bottom-line results to support its investments in software, hardware, and content.

Peloton Interactive Inc. (NASDAQ:PTON) reported better-than-expected FQ4 2024 results. Revenue increased 0.23% year-over-year to $643.60 million, driven by a 2.3% increase in the subscription area. Per-share loss narrowed to $0.08. The improvements came as it reduced total sales and marketing expenses by 19%. The secondary market delivered a 16% increase in paid connected fitness subscribers in FQ4. Connected Fitness revenue from the treadmill portfolio grew 42%. Its strategic focus on improving profitability and investing in innovation positions it for long-term growth and success.

Patient Capital Opportunity Equity Strategy stated the following regarding Peloton Interactive, Inc. (NASDAQ:PTON) in its first quarter 2024 investor letter:

“Peloton Interactive, Inc. (NASDAQ:PTON) declined in the first quarter, hitting its lowest per share valuation in late March since becoming a public company. The company has taken drastic action to right-size the extremely bloated cost structure, expand sales channels (Amazon, Dick’s Sporting Goods), and test other ways to reinvigorate growth. The company is hyper focused on reaching positive free cash flow generation, but the path was pushed out. We continue to believe the value of the business lives in the high-margin, sticky subscription piece of the business. We think at current valuation, the company will either successfully turn things around or be a take-out target.”