Sirius Stock Saw Volatility Due To Short Squeeze, But Company's Business Model Provides Significant Consistency: Analyst

Barrington Research analyst James C. Goss reiterated an Outperform rating on Sirius XM Holdings Inc SIRI with a price target of $5.50.

Sirius XM reported a flat third-quarter FY23 revenue growth year-on-year to $2.27 billion, missing the consensus of $2.29 billion. Adjusted EPS of $0.09 beat the consensus of $0.08. 

While there was exceptional price volatility in July due to a short squeeze, the company’s business model provides significant consistency and predictability. 

Newer growth elements in comprehensive ad sales capabilities plus new service options should support revenue levels. 

Strong cash flow and conservative leverage support the recently raised dividend of $0.1064, which yields 2.5%. 

The company has suspended repurchase activity as the board evaluates Liberty’s proposal to merge SiriusXM with Liberty Sirius. Leverage of 3.3x remains manageable.

Sirius XM plans to preview its updated platform next week on November 8 to improve the consumer experience across discovery and personalization while better targeting streaming-only consumers. 

The company’s relationships with OEMs are supporting the adoption of the 360L platform across an evolving vehicle lineup, which should help the ability to reach consumers with the improved platform in both in-car and streaming environments. 

Price Action: SIRI shares traded higher by 0.82% at $4.32 on the last check Wednesday.