Sirius XM Analyst Sees Potential To Reach Double-Digit Stock Price

Benchmark analyst Matthew Harrigan reiterates Sirius XM Holdings Inc SIRI with a Buy and a $6 price target.

SiriusXM stock advanced 4.6% Tuesday, backed by the closure of the Stitcher podcast app at the end of August. 

Management indicates SiriusXM is not retreating from podcasting but is instead migrating listeners to its SXM app ahead of the new streaming experience debuting later this year. 

There will be no personnel reductions within the SiriusXM Podcast Network, which includes Stitcher Studios and Earwolf, and operations will continue as usual.

Stitcher Premium subscribers, who listen to podcasts sans advertising, got a six-month free trial offer for SiriusXM Platinum Streaming. 

The action follows the March management restructuring, consolidating podcasts with comedy and entertainment programming under common leadership. 

Overall, the entire podcasting space is getting more rational regarding curtailing high exclusivity spending for celebrities – most visibly with Spotify Technology S.A. SPOT terminating its deal with Prince Harry and Megan Markle while merging studios Gimlet and Parcast into a familiar brand. 

Barring a significant economic contraction, even modest benefits from 360L advanced two-way radios and streaming-only potential as the SiriusXM app relaunches later this year should support 2024 self-pay subscriber and Adjusted EBITDA growth. 

It is still the first inning regarding 360L radio benefits for ARPU, trial conversions, retention, and subscriber growth. 

The (relatively) new radios should constitute 40% of the trial starting exiting 2023. 

Platform, technology, and app advances continue. SiriusXM is looking to enhance the vehicular experience while transforming its product and perception from what is now an understandable legacy focus on in-car listening consumption. 

Sensitivities to annual satellite radio + streaming subscriber growth and ARPU suggest SiriusXM has the potential to reach a double-digit stock price over Benchmark’s forecast through 2026 – especially off 360L benefits, including personalization for listeners.

Price Action: SIRI shares traded higher by 2.81% at $4.21 on the last check Wednesday.