It's been quite a year for Peloton (NASDAQ:PTON), which went public last year and has seen its stock triple in 2020 due to COVID-19. The pandemic has shut down gyms and caused demand for home exercise offerings to skyrocket, which has led to backlogs as Peloton has struggled to keep up with demand. Supply chain disruptions related to the contagion didn't help the company's ability to satisfy demand, either.

In line with reports published last week, Peloton has now expanded its product portfolio in a way that will only bolster demand even more.

Man riding Peloton Bike in a living room as a woman walks by behind him

Peloton's original Bike gets a price cut. Image source: Peloton.

A more expensive Bike and a cheaper Tread

Up until now, Peloton has offered a high-end Bike and Tread, priced at $2,245 and $4,295, respectively. The fitness tech company is now bifurcating its lineup to include "plus" versions, adding a more expensive Bike alongside a cheaper Tread.

The current Bike is getting a price cut to $1,895 and the new Bike+ will start at $2,495. Bike+ will feature a rotating 23.8-inch touchscreen, an improved sound system, and integration with Apple GymKit. Introduced in 2017, GymKit lets Apple Watch users connect their smartwatches with various types of exercise equipment to sync fitness data.

The existing Tread is simply being rebranded as Tread+, and Peloton is adding a more affordable Tread to the mix priced at $2,495. The new Tread has a similar display but with integrated speakers and features a more compact design. Here's what the new lineup looks like.

Product

Starting Price

Bike

$1,895

Bike+

$2,495

Tread

$2,495

Tread+

$4,295

Data source: Peloton.

The Bike+ launches this week. The new cheaper Tread will be available in early 2021. All products will continue to include a 30-day trial of Peloton's subscription service. Customers who recently purchased the original Bike at the higher price -- if they are still within the 30-day trial or are awaiting delivery -- will automatically get the price difference ($350) refunded.

Exercising more at home is here to stay

Investors cheered the news, sending shares up 6% yesterday. Analysts have been ratcheting up ratings and price targets in recent weeks, believing that COVID-19's impacts on consumer fitness behavior will be long-lasting and that Peloton is positioned to capitalize on that trend. That most recently includes Telsey Advisory, which this week reiterated an outperform rating on the stock and boosted its price target from $82 to $105.

"This shift in behavior since March likely results in longer-lasting structural changes to the fitness industry," analyst Dana Telsey said. "Once COVID-19 is behind, we expect the high adoption rate of digital fitness to persist and consumers to return to in-person group fitness classes and gyms in lesser frequency than in the past."

The company reports fiscal fourth-quarter earnings tomorrow after the close and analysts are expecting revenue to surge by over 150% to $578.2 million.

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