Now trading at a price of $3.79, Sirius XM has moved -5.6% so far today.
Sirius XM returned losses of -34.0% last year, with its stock price reaching a high of $7.95 and a low of $3.32. Over the same period, the stock underperformed the S&P 500 index by -53.0%. As of April 2023, the company's 50-day average price was $4.68. Sirius XM Holdings Inc., an audio entertainment company, operates audio business including subscription entertainment services in the United States. Based in New York, NY, the large-cap Consumer Discretionary company has 5,869 full time employees. Sirius XM has offered a 2.4% dividend yield over the last 12 months.
Exceptional Profitability Overshadowed by Excessive Leverage:
| 2018-01-31 | 2019-01-30 | 2020-02-04 | 2021-02-02 | 2022-02-01 | 2023-02-02 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $5,425 | $5,771 | $7,794 | $8,040 | $8,696 | $9,003 |
| Gross Margins | 84.0% | 84.0% | 56.0% | 55.0% | 54.0% | 54.0% |
| Operating Margins | 30% | 30% | 28% | 28% | 27% | 27% |
| Net Margins | 12.0% | 20.0% | 12.0% | 2.0% | 15.0% | 13.0% |
| Net Income (MM) | $648 | $1,176 | $914 | $131 | $1,314 | $1,213 |
| Net Interest Expense (MM) | -$346 | -$350 | -$390 | -$394 | -$415 | -$422 |
| Depreciation & Amort. (MM) | -$299 | -$301 | -$468 | -$506 | -$533 | -$536 |
| Earnings Per Share | $0.14 | $0.26 | $0.2 | $0.03 | $0.32 | $0.3 |
| EPS Growth | n/a | 85.71% | -23.08% | -85.0% | 966.67% | -6.25% |
| Diluted Shares (MM) | 4,724 | 4,561 | 4,616 | 4,429 | 4,119 | 3,990 |
| Free Cash Flow (MM) | $2,144 | $2,235 | $2,380 | $2,368 | $2,386 | $2,387 |
| Capital Expenditures (MM) | -$288 | -$355 | -$363 | -$350 | -$388 | -$411 |
| Net Current Assets (MM) | -$9,382 | -$9,511 | -$10,882 | -$11,651 | -$11,719 | -$12,335 |
| Long Term Debt (MM) | $6,741 | $6,885 | $7,842 | $8,499 | $8,832 | $9,256 |
| Net Debt / EBITDA | 3.44 | 3.36 | 2.95 | 3.09 | 2.99 | 3.14 |
Sirius XM has strong margins with a stable trend, wider gross margins than its peer group, and a strong EPS growth trend. However, the firm has a highly leveraged balance sheet. Finally, we note that Sirius XM has weak revenue growth and a flat capital expenditure trend and irregular cash flows.
Sirius XM Is Too Expensive at Current Levels:
Sirius XM has a trailing twelve month P/E ratio of 15.6, compared to an average of 22.33 for the Consumer Discretionary sector. Based on its EPS guidance of $0.33, the company has a forward P/E ratio of 14.2. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 13.5%. On this basis, Sirius XM's PEG ratio is 1.15. Using instead the 9.3% weighted average of Sirius XM's earnings CAGR and the broader market's anticipated 5-year EPS growth rate, the company's PEG ratio is 1.67, which suggests that its shares may be overpriced.
Sirius XM Has an Analyst Consensus of Strong Upside Potential:
The 11 analysts following Sirius XM have set target prices ranging from $3.5 to $7.0 per share, for an average of $5.02 with a hold rating. As of April 2023, the company is trading -6.8% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
Sirius XM has an unusually large proportion of its shares sold short because 27.2% of the company's shares are sold short. Institutions own 12.9% of the company's shares, and the insider ownership rate stands at 83.6%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 2% stake in the company is worth $232,014,676.
