Home fitness equipment has been selling tremendously well for the past year and a half, and iFit, the maker of NordicTrack machines and fitness software, will launch its initial public offering in the near future. In this Fool Live video clip, recorded July 14th, Fool.com contributors Brian Withers, Toby Bordelon and Matt Frankel, CFP, discuss whether the company may deserve a closer look at long-term investors.

Brian Withers: Toby, as we spoke Platoon (NASDAQ: PTON) a lot, the topic seemed interesting to us The Wrap. The owner of the iFit, IFIT, NordicTrack and iFit exercise platform, wants to buy the Sweat fitness platform for $ 300 million. iFit will be public and they are buying a $ 300 million Sweat. The workout seems to take advantage of the home trend, and iFit was formerly known as Icon Health and Fitness, but it already has a fitness platform and is being added with this Sweat app. It seems that iFit has been doing online ordering and studio classes for a while. This is not a new thing for them, and it has a whole line of equipment. You go to his website and for those who want to do rowing machines, belt type, spinning bikes, as well as a training tower and want to participate with on-demand classes or a monitor. You can also use the app without equipment. S-1 is not yet released, the S-1 is usually the thing the company presents to the SEC to talk about all the unpaid finances yet, but the valuation is about $ 7 billion. . This number of the platoon market limit is five times higher. Are you interested in this IPO coming up on IFit, Toby?

Toby Bordelon: I’m a little interested. Here’s the thing. iFit has been around for a long time as you mentioned. I think you and I looked at it briefly when we did a demonstration about home training. We were also looking at it back then and one of my critics, Mike Things Company, had a couple – two different platforms that weren’t fully integrated into all of their products, and now it’s the third. I don’t know, I’m worried about not being able to get a lot of traction in the market like their history because their problem is execution, which makes me less excited about what they offer me. Peloton, in my opinion, is still the number one in terms of enthusiasm and customer adoption and the way people like it, in terms of the enjoyment people have from the platform. I’m very happy with that, it’s definitely worth a look. I don’t know how big this market is. Greater competition for peloton is not great, as more and more is created, less. I think they are finding a relatively small market. I would feel so much better if the new device with Peloton would push the clip faster. The advantage that IFIT has, they get everything. They got the tread, they got the bike, the rowing machines, they got the weight tower you talked about. The peloton just got the bike and the ribbon and wheels had problems, they had to remember. If they are able to push more faster, that makes me very happy. It creates less reason for people to explore other options on other platforms, so it’s something that Platoon needs to do. But overall, this is what I look for, but I don’t know if I would be in a hurry to invest in iFit soon.

Withers: Yes, and people may not know you’re Peloton’s customer, Toby. How has that worked?

Brothel: Me, I have a Peloton, it’s very good. We went on vacation a couple of weeks ago and I didn’t really use it when I came back. I broke the habit. I have to get back in. My wife came in faster than me again, but we were both on bikes three or four times a week.

Withers: That’s wonderful.

Brothel: We liked it, as if we didn’t think we would use it so much, but it’s been so good, especially with the Reno heat record right now, that I don’t want to go outside. The bike is a solution to the weather problems you have when you want to work outside.

Withers: Excellent. Great view. I love the idea of ​​this trend and things like Peloton and Mirror Lululemon (NASDAQ: JULY) and bringing technology to home gym equipment was a lack of equipment for my home workouts. You need peer pressure and motivation to use it regularly, but as an investment, I’m not selling in this category. There are high upfront costs for consumers and Peloton has done a good job with buying now and trying to pay for it later, but the revenue from that equipment, that hardware, that physical product in advance is much higher. than the constant subscriptions they pay. Let’s do the math here, a $ 2,400 bike a month compared to a $ 40 family subscription, $ 120 a quarter, so the bike quarter earns 20 times your subscription. As the revenue growth of bicycles slows down or the tread slows down, I believe that these unprecedented growth rates generated by these devices will really affect these companies in a difficult way.

Matt Frankel: I would think that Brian would be the one who is really strict in them, so I am even less optimistic about this trend. I love the platoon, like Toby, we have a platoon in our house. My wife uses it all the time. I’m training outside of the home type, not outside. Columbia, South Carolina, is as hot as Reno in the summer. I do what’s called Orangetheory Fitness, I don’t know if you know that chain, and I swear, but the Peloton model is a great model. I think all of these physical businesses to stay home will take a couple more years, as the pandemic is coming to an end, people are really giving credit. As Brian recently said, hardware sales, real bikes and equipment will start to decline. Everyone who wanted a platoon bought it during the pandemic, at least the people who want it now. I saw that the subscription revenue is great, I mean, it’s a great revenue model, especially in the case of Peloton, if you can’t launch the tape now without a subscription, I don’t know if you saw that change. It’s a great business, when I reopen it I think people will find it harder than time to stay at home than they give to all those physical businesses.

This article expresses the opinion of the writer, who may not agree with the “official” recommendation of the Motley Fool premium counseling service. We are poppies! Challenging an investment thesis, as well as ours, helps us think critically about investing and make decisions that will help us become smarter, happier, and richer.