Over the past year, Peloton (NASDAQ:PTON) has been one of the best-performing stocks. Shares have more than quadrupled during the pandemic as people shifted to exercising at home, although it's worth remembering that Peloton was already putting up stellar growth figures before the public health crisis. After initially buying the stock last summer around $63, I recently added even more to my position at approximately $109.

Here's why.

Woman kneeling with weights while watching a workout on a Peloton Bike+ screen

Image source: Peloton.

I purchased a Peloton Bike+

Over the years, my wife and I have been searching for home exercise equipment that would keep us engaged. We've had little success in finding a sustainable solution and thought maybe a Peloton would be different due to the deep content integration and ease of use. After ordering a Bike+ in January and waiting an extended period of time due to the company's widely publicized supply constraints, the Bike+ was delivered last month.

Having personal experience with a Peloton product has bolstered my confidence in the investing thesis, as the company offers an intuitive experience that is engaging and the value proposition is extremely compelling compared to a traditional gym membership. Before including the cost of equipment, a Connected Fitness subscription costs $39 per month and can be shared within a household, and exercising at home is far more convenient. With a trailing-12-month (TTM) retention rate of 92% for Connected Fitness subscriptions, it's clear that the vast majority of Peloton members agree.

Peloton's pullback

Like many high-flying growth stocks, Peloton shares started to pull back significantly in late February. That's not surprising considering the stock's rally over the past year, which has led to meaningful multiple expansion as investors price in lofty growth expectations for the future. Most growth investors know that stocks with frothy multiples -- shares currently trade at over 13 times sales -- tend to be more volatile. Currently, Peloton shares are approximately 30% off the all-time highs of around $171 set earlier this year.

PTON Chart

PTON data by YCharts.

Peloton continues to report triple-digit growth rates across most of its most critical operating metrics, including revenue growth, Connected Fitness subscription growth, and total quarterly workouts. The business fundamentals remain incredibly strong, and the recent earnings dip was a buying opportunity.

Closing Precor

Announced in December, Peloton has now closed its $420 million acquisition of Precor. Investors had cheered the deal when it was first proposed, as the transaction will help grow the business in numerous ways.

For starters, Peloton is acquiring a large domestic manufacturing footprint, which will help it mitigate the supply chain challenges associated with shipping its products from Asia. Second, Precor already has a massive position in the commercial fitness equipment market, giving Peloton immediate access to a new growth vertical that is highly complementary to its existing business. In the near future, imagine going to the gym on a corporate campus where you work or in a hotel while traveling and having your activity recorded and synced to your Peloton user profile.

Peloton is already eyeing other product categories beyond cardio and has hinted that it may enter the strength category next. There are persistent rumors of Peloton launching a rower.

As the pandemic gradually subsides, Peloton has numerous growth avenues ahead of it. The recent pullback is offering long-term investors a chance to scoop up more shares at relatively more affordable valuation multiples.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.