Is Beachbody the New Peloton?

As gym rats and fitness addicts alike flocked to Peloton (PTON) at the onset of the pandemic, America quickly anointed the connected-fitness company as a stock market darling in 2020.

Peloton saw shares soar well over 400% year-to-date and recently announced its acquisition of rival fitness equipment maker Precor for $420 million that gives the company even more market share as well as increased manufacturing capacity.

With many analysts up and down Wall Street becoming more intrigued by the idea of connected-fitness being the wave of the future, there’s another company that’s beginning to drum up attention.

Thanks to a three-way merger between the Forest Road SPAC (FRX), Beachbody Company Group, and Myx Fitness, a fitness juggernaut might soon be unleashed, making a run at the growing market Peloton has created over the years. The combined company will operate under the Beachbody brand and its stock will soon trade under the ticker symbol “BODY” on the NYSE.

Breaking down, Beachbody and Peloton’s business models, Market Realist sees many similarities. Both offer subscription-based services where you can stream online workout videos and live videos from anywhere, and now all workouts require equipment.

But one of the most glaring differences between the two companies is that while Peloton is a connected workout service, which requires the use of its own exercise bikes and treadmills, Beachbody comes with no such requirement. In addition, Beachbody’s annual subscription costs $99, while Peloton’s digital subscription costs $156 per year.

With the online fitness market expected to grow from $6 billion in 2019 to $59 billion by 2027 and $10 billion of annual consumer spending expected to leave the gym sector as customers shift to at-home options, the market is already pining for a lower-cost alternative to what Peloton offers. This is where it seems easy to be optimistic about a company like Beachbody.

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