Sirius XM Q3 Results Beat Expectations; Shares Pop 2%


Shares of American broadcasting company Sirius XM Holdings, Inc. (SIRI) gained 2% on Thursday after the company reported better-than-expected third-quarter 2021 results on robust growth in subscribers.

Earnings stood at $0.08 per share and topped the Street’s estimates of $0.07 per share. Also, the figure compares favorably with earnings of $0.06 per share reported in the same quarter last year. (See Sirius XM stock charts on TipRanks)

Total revenue of $2.2 billion outpaced the consensus estimate of $2.17 billion. The company reported revenue of $2.03 billion a year ago.

The SiriusXM segment’s revenue grew 5% year-over-year on the back of a 5% increase in its average revenue per user (ARPU) to $14.84 and a 264% increase in self-pay subscribers.

The Pandora segment’s advertising revenue grew 32% year-over-year driven by strong monetization of $109 per thousand hours at Pandora. The segment also benefitted from Stitcher acquisition in the fourth quarter of 2020. (See Top Smart Score Stocks on TipRanks)

The CFO of SiriusXM, Sean Sullivan, said, “SiriusXM’s third quarter results were strong across the board and support the new, higher nancial guidance we have provided today. We expect to see continued net self-pay subscriber growth in the fourth quarter, but the third quarter’s lower auto sales – primarily driven by supply issues – will reduce conversion opportunities beginning in the fourth quarter.”

The company expects SiriusXM self-pay net subscriber additions of over 1.1 million in 2021. Also, the total revenue is anticipated to be about $8.65 billion, up from $8.55 billion previously guided.

Following the release, Barrington analyst James Goss maintained a Buy rating on SiriusXM with a price target of $8 (upside potential of 31.3%).

Goss noted, “Sirius XM offers an excellent business model with significant consistency and predictability. These attractive dependability characteristics are supplemented with newer growth elements in comprehensive ad sales capabilities plus new service options designed to spur increased subscriptions and reduced churn, facilitating an acceleration of growth in key profit metrics such as EBITDA and FCF.”

The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 3 Buys and 3 Holds. The average Sirius XM price target of $7.74 implies 27.3% upside potential.

Investors should always be aware of the risks involved in any stock. According to the new TipRanks’ Risk Factors tool, SIRI is at risk mainly from two factors: Tech & Innovation, and Ability to Sell, both contributing 26% to the total 38 risks identified for the stock. Under both the risk categories, Sirius XM has 10 risks, details of which can be found on the TipRanks website.

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