Peloton Interactive Inc. shares rebounded Friday on optimism the companys home-workout pitch will continue to resonate with consumers even after recent accidents involving its treadmills.
On Thursday, the New York-based fitness company said a child died from an accident related to its Tread+ machine. Another child sustained significant injuries from a similar incident but is expected to recover. The stock fell almost 5% that day.
Its a tragic accident, said Ron Josey of JPM Securities. It brings more awareness that we all need to be extra cautious when we have equipment like this in our home.
Read more: Peloton Treadmill Accidents Lead to Child Death, Another Injury
Still, the analyst said Peloton equipment does not seem to be more prone to these types of accidents than other exercise machines used at home. That view was supported by data released Friday by the U.S. Consumer Product Safety Commission, which is investigating the Peloton incidents.
The agency said that 17 deaths were reported to the CPSC between 2018 and 2020 related to treadmills. An estimated 22,500 treadmill-related injuries, including about 2,000 involving children under eight years old, were treated at U.S. hospital emergency rooms in 2019, the CPSC added. A search of the agencys online database covering all time periods found only two incidents tied to Peloton gear.
With this new awareness, people can put the Tread in a different spot in the home, and I think this would be the case with any exercise equipment, Josey said. There are ways to avoid this and I dont think it changes the overall trend of people not going back to gyms. Folks are finding very effective in-home workouts with Peloton leading the way.
Peloton shares rebounded 5.4% to close at $108.31 in New York trading Friday.
If the pandemic continues to subside, and more children return to school, that could reduce the risk of them playing on Peloton gear unattended.
We are currently assessing ways to reinforce our warnings about these critical safety precautions to hopefully prevent future accidents, Peloton Chief Executive Officer John Foley said on Thursday. The need to take safety precautions is especially true during what I hope is the final stretch of the pandemic where everyone is still at home, he added.
Josey estimates that the Tread+ makes up a small percentage of the companys hardware unit sales. A cheaper model has started rolling out that could eventually sell more.
With assistance by Jeran Wittenstein
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