The same millennials and fitness enthusiasts who flocked to Peloton Interactive's (PTON 1.87%) connected-fitness equipment during the pandemic may be heading back to the gym soon. That puts the company's spectacular growth at risk, and investors are already wary. That at least partially explains why Peloton's stock is down 22% year to date as of this writing.

But the company just announced that it's launching a new program aimed at curbing the potential churn. It's a smart move at the right time. Let's dive in.

A group of people in workout clothing high-fiving each other.

Image source: Getty Images.

The just-in-time IPO

Before the pandemic, Peloton was a premium label with an expensive product that was catching on in several markets. Its stock went public toward the end of 2019 without too much fanfare, but it was perfectly positioned to skyrocket as soon as the pandemic started. Sales exploded under pandemic conditions, and Peloton stock gained more than 400% in 2020.

Management took the success as an opportunity to expand, and it embarked on several ventures over the past year, such as the acquisition of Precor exercise equipment and a product launch in Australia. These steps are even more important as the pandemic looks like it's winding down in many regions; as economies reopen, people are less dependent on home-fitness options.

The company's most recent launch is a corporate wellness program, which it's marketing to corporate environments, making it an excellent way to hedge against its home-based product line.

Not just a home business anymore

The corporate wellness program provides access for company employees to subscriber content and community-building programs, and companies such as Wayfair and Samsung have already signed on. Peloton is marketing it as a way for companies to lower employee burnout, and improve their mental and physical health, helping them achieve greater productivity at work.

It's also a way for Peloton to stay relevant as employees head back to the office.

Growth was still phenomenal in the 2021 fiscal third quarter ended March 31, with 141% year-over-year revenue growth and a 135% increase in connected-fitness subscriptions. Total members reached 5.4 million; the 12-month retention rate was 92%; and average workouts per connected-fitness subscriber grew from 17.7 to 26.

Good as that may be, it demonstrates some deceleration from the highs over the past year. Peloton is a step ahead, making moves to keep growth strong while trends are changing. Other companies, such as Netflix, are already seeing some signs of a growth slowdown after pandemic elevation, and that's bound to happen. It's not necessarily a bad sign, and investors should keep it in perspective; it's more important to see how a company plans to move forward, and this is good news for Peloton.

A man and woman in workout clothing high-fiving with exercise equipment in the background.

Image source: Getty Images.

What's coming up next?

Will the company roll out fitness centers next? It hasn't hinted that it will, but I wouldn't rule it out. Peloton is a forward-thinking company that has made some clever plays, and at the right time, it could make significant upgrades to its model.

For the time being, investors should still expect growth from the current model. The stock price got beaten down after some of its equipment was recalled due to safety concerns and investor concerns about post-pandemic growth. Is this a value trap? I think there's enough going on to warrant confidence.

Shares of Peloton still don't come cheap, trading at 141 times trailing 12-month earnings. But it does make a profit, unlike other growth companies, and this price-to-earnings (P/E) ratio is as cheap as it's ever been. If you've been thinking about taking a position in Peloton, this might be a good time.