What happened

Shares of Peloton (NASDAQ:PTON) have fallen today, down by 5% as of 1:45 p.m. EST, as investors continue to worry that progress on three different COVID-19 vaccine candidates threaten the home exercise company's growth prospects. Meanwhile, Peloton has been struggling to meet the surge in demand that the pandemic has created.

So what

The medical community and pharmaceutical industry have been announcing encouraging progress on potential vaccines in recent weeks, sparking hopes that the end of the pandemic may be on the horizon. Companies and governments will still need to tackle the complex logistics of distributing millions of doses around the world.

The first vaccines are expected to be administered in December, and experts believe that it will take four-to-six months for vaccines to be widely available.

A young man and woman using a Bike+ at home.

Peloton's Bike+. Image source: Peloton.

Now what

Peloton has been an inadvertent beneficiary of the public health crisis, which forced many retail gyms to close. Many of those businesses have gone bankrupt and aren't coming back. Peloton's Connected Fitness subscribers soared 137% last quarter, and revenue more than tripled. However, the booming demand for home exercise equipment has strained Peloton's supply chain, resulting in significant delivery delays for customers.

The Wall Street Journal this morning shared various anecdotes of customers who have become frustrated with the delays, with some customers switching to a competing brand. It can take months for a customer to take delivery of their order. Peloton's site currently estimates that the delivery time for its new flagship Bike+ can be over 10 weeks.

"We expect the growth in our supply chain to allow us to get back to normal order-to-delivery time frames for our Bike by the end of this calendar year," CFO Jill Woodworth said on the earnings call earlier this month. "However, we will likely be operating under Bike+ supply constraints for the foreseeable future, causing longer order-to-delivery time frames for Bike+ for a couple more quarters."

The challenge is that vaccine distribution will also likely ramp up within a couple of quarters, potentially hurting demand for Peloton's gear just as its supply chain starts to catch up.

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