You're feeling pretty good as a Peloton Interactive (PTON 0.66%) bull these days. The stock has nearly tripled in 2020, moving higher again on Thursday when most of the market went the other way. 

Bears aren't buying it. They argue Peloton is overvalued, its product overhyped, and that competition will eat them alive. The naysayers have been saying that all the way up, so let's poke some holes in some of the more common bearish missives. 

A woman on her Peloton stationary bike takes a break to look out her high-rise window.

Image source: Peloton Interactive.

1. Peloton lowering prices is a sign of desperation

One of the more intriguing moves by Peloton this month is that it lowered its entry-level price points. Its flagship $2,245 stationary bike got marked down to $1,895 on Sept. 9. Peloton also unveiled that its $4,295 treadmill will be joined a cheaper $2,495 model. 

Lowering prices isn't typically an encouraging sign. It results in lower margins and the sense that a company's hearing footsteps or facing waning demand. Thankfully for Peloton that's not the case at all. Even before announcing the new pricing strategy -- and it bears pointing out that Peloton did also introduce a more expensive $2,495 Bike+ -- the fast-pedaling at-home fitness specialist was telling new buyers they would have to wait several weeks for their purchases. 

The backlog is real. Peloton closed out its latest quarter with customer deposits and deferred revenue quadrupling to $363.6 million over the past year. Peloton introducing a cheaper treadmill and lowering the price of its signature bike is part of a brilliant barbell pricing strategy with its hardware. 

Was Tesla (TSLA -3.40%) desperate when it began introducing more affordable electric vehicles? Is Apple (AAPL 0.51%) a chump for keeping lower-priced iOS gadgetry around? You know the answer. You know what Peloton is doing here. It's making a play for the broader market. 

2. Peloton's market cap per subscriber is outrageous

There are 3.1 million members on Peloton's platform, and with its nearly $22.6 billion in enterprise value that translates into investors paying more than $7,000 per Peloton member, a sky-high number -- and it gets worse. That figure includes the 316,800 members without Peloton hardware on cheaper digital workout subscriptions, and other additional members. Peloton's bread-and-butter connected fitness subscription platform is at 1.09 million, and using that as a measuring stick we're at a market cap of roughly $21,000 per subscriber.

This is certainly a difficult multiple to justify without coloring out the entire page, but it's an easy target for skeptics. Netflix (NFLX -0.08%) commands an enterprise value that translates to just a little more than $1,160 per paying streaming account. The New York Times (NYT 1.29%) with its 6.5 million -- largely digital -- total subscribers and its modest $6.3 billion enterprise value clocks in slightly less than Netflix at just below $1,000 per subscriber.

Is a Peloton subscriber really worth about about 20 times a Netflix or New York Times subscriber? Hold off on shaking your head until you play this out. How many subscribers would Netflix or The New York Times have if they had to make a four-figure initial outlay for access to the platform -- in Peloton's case one of its bikes or treads? How many Netflix or New York Times digital subscribers would there be if they matched Peloton at $39 a month? 

Not every subscriber is the same. Peloton users are far more loyal than those on the Netflix or New York Times platforms. Peloton's 12-month retention rate is a lofty 92%. Its average net monthly connected fitness churn is just 0.75%. Netflix stopped providing its churn eight years ago, back when it was largely a DVDs-by-mail service. It was losing about half of its subscriber base every year. It's a lot easier to cancel Netflix and The New York Times in the digital world. 

Then we have growth and what that means for the future. Revenue soared 172% in Peloton's latest quarter, compared to an increase of 25% at Netflix and a decline of 8% at The New York Times. To be fair, the slide at The New York Times is about a decline in ad revenue more than offsetting positive gains on the subscription front. Either way, Peloton expects to top 2 million connected fitness subscribers a year from now -- so that lofty multiple will be shaved in half if the stock marches in place. Netflix and The New York Times should be able to post modest subscriber growth in that time, but it won't be anything like what we will see with Peloton.

3. The competition is coming for Peloton

Apple's media event this week included the unveiling of Apple Fitness+, a low-priced platform that some are comparing to Peloton. It's not fair. Apple Fitness+ is a closer match to Peloton's smaller digital subscription platform, and in Apple's case its addressable market is limited to Apple Watch and iPhone owners. Peloton's competitively priced digital memberships are platform agnostic. This is going to be a competitive market with high account turnover for all players without the four-figure tethers of hardware ownership. It's not a threat to Peloton's bread-and-butter connected subscriber business.

Some may also argue that Peloton's business won't be as popular or necessary once it's safe to return to the creature comforts of the gym or spinning class boutique. Don't bet on it. Peloton's momentum is fierce, and glowing word of mouth is driving the spike in orders. You don't catch up to Peloton; you just hope that you're not in its way. The same can be said about the now proven growth stock that Peloton has become. Good luck staying bearish. You're probably going to need it.