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There is a very current event that is happening in the market with a sales forecast differing from actual sales for a very popular product

There is a very current event that is happening in the market with a sales forecast differing from actual sales for a very popular product and company. According to Jennifer Calfas, a writer with The Wall Street Journal, Peloton reported a wider than expected loss in its last quarter, and it is also going through a major recall of many bikes due a product defect occurring with the seats on many units (Calfas, J 2023). As a result of the current defect, 2.2 million exercise bikes are being recalled due to the seats that could break and potentially cause injury (Calfas, J 2023). The issue with the lower sales from the previous quarter is occurring at the same time as this recall for a different reason. Last fiscal quarter, Peloton struggled to unload on its unsold web-connected bikes and treadmills. A positive for the company is that it is shifting focus on selling more subscriptions than equipment, and it has increased the amount of subscriptions by 74,000 from the previous quarter. As an external investor, if a company like this had predicted sales that were much lower than actual sales, I would research why this occurrence is happening and all the different factors. After understanding the external factors that added to the discrepancy, I would look at the what the future sales growth would be for the company. When a company overestimates future sales, like Peloton did, I would look to see why this occurred and the likelihood of this happening again. As an external investor, I would use predictive analysis as one of the tools to evaluate a company. However, I would also consider other factors such as the company's competitive position, management team, and financial health, to make an informed investment decision.

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