Peloton's stock will trade for the first time on a public market Thursday, and one early investor told CNBC the company is at a similar stage as Netflix Inc NFLX was in 2002.
What Happened
Peloton is a maker of interactive exercise machines and has already expanded revenue from $220 million company two years ago to $915 million in sales last year, Michael Duda, founder and managing partner of Bullish, said on CNBC's "Worldwide Exchange."
Over the same time period, the company also captured 5% of its addressable market and operates in just three countries.
Some investors may be looking at recent failed IPOs as a warning sign to stay away from Peloton's listing. But Duda said the financials behind the company "don't lie" and highlighted the following:
- Low churn.
- An "amazing" fan base that is very eager to recommend the product to others.
- Eighty percent of buyers weren't even in the market for a home fitness product before buying a Peloton.
"The fundamentals are there, it's a strong business [that's] just getting started," he said.
Why It's Important
Peloton isn't an exercise equipment maker, rather at is a "digital fitness company" that makes money in venues most investors overlook, he said. For example, total digital revenue will equal nearly all revenue from recent IPO Beyond Meat Inc BYND.
It's also important to note that consumers can purchase an online subscription without needing to buy one of the company's equipment machines, Duda said.
What's Next
Peloton's priced its IPO Wednesday at a range of $26 to $29 and shares will open during Thursday's trading session.
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