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Sirius XM Deemed a Wait-and-See Until Subscriber Growth Returns

The investment case hinges on reversing a multiyear decline in self-pay users.

Overview

  • Sirius XM reported 31.2 million self-pay subscribers at Sept. 30, down from 31.5 million a year earlier after three years of slippage.
  • Free cash flow rose 176% year over year to $257 million in Q3, and executives target $1.5 billion in 2027 versus about $1.225 billion this year.
  • Shares are down roughly 67% over five years as of Nov. 19, even with Berkshire Hathaway holding about 37% of the company.
  • The stock trades near 6.9 times forward earnings and offers a dividend yield of about 5.24%.
  • The article argues that streaming competition from Apple, Alphabet, and Spotify weakens satellite radio’s appeal, so consistent user growth is needed before buying.