Shareholders, Subscribers Abandon Sinking Sirius XM (NASDAQ:SIRI) Ship
SiriusXM (NASDAQ:SIRI) experienced a decline in subscribers and revenue, causing their shares to drop over 7.5%. Despite this, there were some positive aspects, such as a slightly lower rate of loss compared to the previous year. Analysts have a moderate buy consensus rating on SIRI stock, with a price target implying 20.25% upside potential.
It was a disaster at SiriusXM (SIRI), as the satellite radio company / music streamer found itself on the bad end of a lot of bad news. Deep decline in subscriber counts, and accompanying losses in revenue, sent Sirius shares into a pit, down over 7.5% in the closing minutes of Thursday’s trading session.
The numbers were a calamity. The quarter ending June 30 saw around 173,000 subscribers depart the platform over that quarter. That’s around 100,000 self-pay subscribers and 73,000 paid promotional subscribers, taking advantage of one of SiriusXM’s promotional offers to give the service a try at a fairly healthy discount.
While this sounds terrible, there was actually a bright spot to it all…as bright spots go, anyway. That massive loss was actually slightly better than the rate of loss from the same time the previous year. Still, with churn holding at 1.5%, that still represented a loss of revenue of about 5%, and a net loss in average revenue per user of around $0.42 per share.
Beginning of the End?
There’s a little more good news for Sirius here, such as it is. It’s maintaining its guidance for the third quarter. It expects to make around $8.75 billion for the full year, with free cash flow of around $1.2 billion. That’s slightly less than what some analysts figure, looking for around $8.77 billion. But at that point, you might as well call it “in-line.”
And that’s when an already-murky picture gets further muddied. Sirius XM stock has been trading for the last 30 years, yet the latest drop in revenue it’s seen is actually the second worst it’s seen…ever. And despite all this, net income was actually still up, somewhat, and some analysts are even identifying turnaround catalysts potentially in the offing. It seems that for every bit of bad news, there’s a bit of good that makes it just a little less obvious.
Is Sirius XM a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SIRI stock based on four Buys, six Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 33.99% loss in its share price over the past year, the average SIRI price target of $3.86 per share implies 20.25% upside potential.
See more SIRI analyst ratings
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