Peloton Interactive stock was climbing on Tuesday after the at-home fitness company unveiled new treadmills that investors seemed to think could lead to a much-needed boost in product demand.
Peloton announced Tuesday morning that it was launching three new treadmills. The standout product from this launch was the Tread Flex, which is the company's first foldable treadmill. But that folding feature wasn't what was catching investor's attention. Instead, it was the $2,195 price point. That's $1,100 less than Peloton's existing treadmill, the original Tread.
"Today, Peloton Interactive, Inc. is deepening its commitment to running, walking, and hiking while strengthening its position in the treadmill market with the launch of a new, accessibly priced, space-saving model," Peloton said in its press release.
Peloton also launched the Tread Vision at $3,495 and the Tread+ Vision at $6,695. All three treadmills will be available on Oct. 1.
It's rare for consumers to hear about a lower priced launch in the tech world nowadays, especially as the memory shortage pushes up costs across the space. But Wall Street seemed pleased with Peloton's choice to introduce a lower priced model to its lineup. The stock was up 5.6% to $5.22 and was on pace for its largest percentage increase since July 20, according to Dow Jones Market Data.
Peloton needs a sales boost. Revenue has fallen each year since its fiscal 2021 peak of $4.02 billion. Tuesday's stock gain is a sign that shareholders are likely hoping that introducing a less expensive model into what's historically been a premium priced lineup can help boost demand.
Peloton has also been trying to get new customers into the fold through its artificial intelligence updates that give users personalized insights into their exercises. The company announced on Tuesday that it was expanding its AI software, Peloton IQ, to help treadmill users. This includes sharing run analysis and personalized pace targets.
Investors are looking for proof that these initiatives are working. The stock has dropped 97% from its all-time closing high of $167.42 on Jan. 13, 2021.