Ever since Sirius XM (Nasdaq: SIRI) flirted with Lady Bankruptcy, there's been no shortage of naysayers and speculators waiting for the final ball to drop.

Fortunately for investors of Sirius, that day never came. In fact, quite the opposite occurred.

The turnaround
Sirius was able to get a fresh capital infusion from Liberty Capital (Nasdaq: LCAPA) in exchange for a 40% stake in the business. This not only helped fend off a takeover from Dish Network (Nasdaq: DISH) chairman Charlie Ergen, but it also provided some much needed breathing room for the company in order to get its ducks in a row.

Now, almost two years later, Sirius's stock is sitting pretty at $1.43. The company has had several consecutive quarters of earnings sitting slightly above breaking even, and most recently, reported diluted earnings per share of $0.01, above analyst expectations. In addition, it's been able to generate about $180 million in free cash flow in the past year, it's growing subscribers and reducing churn, and it's got about $8 billion in net operating losses that it can carry forward against any earnings, so taxes are going to be about nil in the near future. Not a bad setup for Sirius investors, one might say.

The questions
Yet still the doubters are out there (myself probably falling somewhat under that category), as represented by the 5% short ratio as a percentage of float. Investors are constantly touting the growth of Pandora and its 65 million registered listeners in the U.S. as a direct and serious threat to the company. Apple (Nasdaq: AAPL), Research In Motion (Nasdaq: RIMM), and Google's (Nasdaq: GOOG) Android phones are becoming more and more popular every day, as the smart phone phenomena doesn't seem to be burning out anytime soon. Does this mean that Sirius' subscriber base is going to shrink as users use their mobile devices to stream free tunes? Maybe. But that's not my biggest concern.

It doesn't have to do with Howard Stern, the overall subscription model, or the ability to constantly surprise Wall Street with positive news.

It's simple: the valuation.

Including Liberty's 40% preferred-share stake in the company, there are about 6.4 billion shares outstanding, which commands a market cap of $10 billion and an enterprise value of $13 billion. Right now, the company has a forward P/E of about 71 -- no one is out there arguing that this stock is cheap. It's certainly growing subscribers faster than DirectTV (Nasdaq: DTV) or any of the other major cable providers, but still, does it deserve such an incredible premium?

What I'd like to hear from Sirius bulls is where they actually see the price tag, in say, about a year? Here at The Motley Fool, we've got no shortage of Sirius fans, so I hope to get some great comments and hopefully some analysis behind the conclusions.

Sound off in the comment section below!

Jordan DiPietro owns no shares of any companies listed above. Google is a Motley Fool Inside Value pick. Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor pick. The Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.