Damodaran says Peloton is worth $ 19 with "the benefit of every doubt"

Platoon is worth at most $ 19 per share, according to the Wall Street valuation guru.

The fitness start-up dropped by about 11% during its public debut Thursday, at $ 25.76 per share, a price lower than its introductory price of $ 29 per share, which was totally above expectations. Professor Aswath Damodaran of New York University, sometimes called the "Dean of Evaluation", said the assessment was "too high".

"My estimate is between $ 18 and $ 19, which gives them the advantage of any doubt," Damodaran told CNBC's "Power Lunch" on Thursday.

If Peloton is trading below $ 27, it is poised to become the second worst unicorn debut this year. Uber is currently in second place with a loss of 7.62%. The online dentistry company SmileDirectClub has slipped 28% on its debut, the worst market start for a unicorn start-up in 2019.

"I think the problem here is that you basically have a good business model, but I do not think it can be sufficiently developed to justify market capitalization," Damodaran said.

Peloton's offer initially valued the digital fitness company at $ 8.1 billion, but it raised $ 1.16 billion.

However, said Damodaran, unlike Uber and WeWork, Peloton is on the road to profitability because of its underwriting model.

"To give Peloton credit, their business model is a bit more elaborate than WeWork's and Uber's," said Damodaran. "It's the underwriting model that will eventually make them profitable.This is a gift that keeps on giving."

The increase in membership helped Peloton sales reach $ 915 million for the year ended June 30, up 110% from $ 435 million in fiscal 2018.