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Peloton Jumps as Investors Say Buy

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By Christiana Sciaudone

Investing.com -- Peloton (NASDAQ:PTON) rose almost 6% after getting a boost from a hedge fund boss and an asset manager, who essentially dismissed the treadmill recall.

Peloton, which has a Netflix-like subscription model, could see shares soar to $300 in the next few years, hedge fund manager Ram Parameswaran of Octahedron Capital said at the Sohn Investment Conference, according to Seeking Alpha. Meanwhile, Aureus Asset Management CEO Karen Firestone said on CNBC that the company will be able to overcome the recall debacle and is priced to buy.

Peloton is down more than 40% since hitting a record in January. The pandemic darling has fallen as the U.S. reopens thanks to widespread vaccinations against Covid-19. They are also down after a recall of its treadmills following the death of a child and the injury of others.

"We think the recall worries are highly overblown," Parameswaran said, estimating that less than 5% of treadmills will be recalled and any imminent sales lost will be more than made up for in three months.

Other fast-growing companies have shown the ability to recover from difficult situations in the past, Firestone said, and Peloton should be no different. Earnings will continue to grow, she said.

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