In a report released today, Jeffrey Wlodarczak from Pivotal Research upgraded Sirius XM Holdings (SIRI – Research Report) to a Buy, with a price target of $4.90.
Jeffrey Wlodarczak’s rating is based on a comprehensive evaluation of Sirius XM Holdings’ recent financial performance and future growth prospects. In the first quarter, Sirius XM reported subscriber numbers that met expectations, a slight revenue growth that surpassed predictions, mainly driven by their Pandora assets, and EBITDA growth that exceeded the originally flat forecast. The company’s investments in its out-of-car application and personalized marketing strategies are expected to pay off in the second half of the year, while cost savings and slight increases in average revenue per user (ARPU) have also contributed to a stable financial outlook without necessitating a revision of the year-end revenue, EBITDA, or free cash flow forecasts.
Moreover, Wlodarczak underscores the potential for significant free cash flow acceleration in 2025 and beyond, as capital expenditures for satellite replacement peak in 2024. This outlook is buoyed by anticipated positive trends in subscriber growth and a likely price increase in 2025. Despite the 8.2X free cash flow multiple for 2024, Wlodarczak believes that the stock’s potential is not fully reflected in the current market price, especially considering the value of spectrum assets that could significantly increase the target price. His analysis suggests that the stock is undervalued and poised for growth, which supports the Buy rating and maintains a year-end target price of $4.90.
In another report released yesterday, Seaport Global also upgraded the stock to a Buy with a $4.30 price target.
Based on the recent corporate insider activity of 112 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SIRI in relation to earlier this year.
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Sirius XM Holdings (SIRI) Company Description:
New York-based Sirius XM Holdings, Inc. is a radio company, which provides satellite radio services on a subscription fee basis. The company offers music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services. Its brand channels include SiriusXM Traffic, SiriusXM Travel Link, NavTraffic, NavWeather, SiriusXM Aviation and SiriusXM Marine.
