Peloton To Roll Out New Pricing Model: What You Need To Know

Peloton Interactive Inc PTON CEO Barry McCarthy took over as chief executive officer last month and immediately went to work following months of downward price action in Peloton's stock. His latest attempt to turn things around involves reimagining the fitness company's pricing model. 

What Happened: According to several reports, Peloton has confirmed it will test out a new pricing plan beginning Friday. Peloton customers will now be able to combine the costs of their workout equipment with Peloton’s on-demand fitness classes, allowing them to pay a single monthly fee.

The trial period is expected to go live in select states, ranging from $60 to $100 per month. Customers will only be able to package payments through Peloton's in-person locations. The trial will not initially be available for online customers. 

Why It Matters: Peloton shares have been spiraling down over the last year. In addition to the management change, Peloton cut back production of some of its products and trimmed 20% of its workforce. 

Last week, Peloton announced that new customers who buy a Peloton Bike or Tread between March 3 and March 22 will get 100 days to decide if they want to keep the product. Thursday's announcement adds to the free trial roll-out. 

It appears many of the prospective customers who decide to take Peloton products for test rides will be met with more attractive pricing packages, which could sway potential customers to purchase following the trial. 

See Also: 'Zoom Is Now A Verb': Gene Munster On Why Investors Should Be Looking For Stocks With M&A Potential

PTON Price Action: Peloton has traded between $21.33 and $129.70 over a 52-week period.

The stock was down 3.71% at $22.57 Thursday afternoon at publication.

Photo: Courtesy of Peloton.