New York-based Sirius XM Holdings (SIRI) is an audio entertainment company offering subscription and ad-supported products. It operates two major platforms under the SiriusXM and Pandora brands, which together reach about 150 million listeners.
With this in mind, we used TipRanks to take a look at the latest financial performance and newly added risk factor for Sirius XM. (See Analysts’ Top Stocks on TipRanks)
Q3 Financial Result
Sirius XM reported a 9% year-over-year increase in revenue to $2.2 billion for Q3 2021. The SiriusXM segment’s revenue rose 5% to $1.66 billion, and the Pandora segment’s revenue jumped 32% to $404 million. The company posted EPS of $0.08 versus $0.06 in the same quarter last year and beat the consensus estimate of $0.07.
Sirius XM returned $383 million to shareholders in Q3, consisting of $324 million in share repurchases and $59 million in dividends. (See Sirius XM Holdings stock charts on TipRanks).
Risk Factors
According to the new TipRanks Risk Factors tool, Sirius XM’s main risk categories are Tech and Innovation and the Ability to Sell, each representing 26% of the total 38 risks identified for the stock. The company recently added one new risk factor under the Production category, which accounts for 16% of its total risks.
Sirius XM tells investors that it has been difficult to obtain certain important components that go into its satellite radios because of the global chip shortage. Sirius XM partners with automakers to include its satellite radios in their vehicles. Automakers that build vehicles with Sirius XM radios are also struggling to obtain semiconductor components used in the production process. As a result, some automakers have been forced to stop or reduce production. Sirius XM warns that the chip shortage affecting its radio production and vehicle manufacturing may adversely impact its subscriber acquisition efforts.
The Tech and Innovation risk factor’s sector average is 11% against Sirius XM’s 26%. The Ability to Sell risk factor’s sector average is 16% against Sirius XM’s 26%. The Production risk factors’ sector average is 13% compared to Sirius XM’s 16%. Sirius XM’s shares have declined about 1% since the beginning of 2021.
Analysts’ Take
Following Sirius XM’s Q3 earnings report, Barclays analyst David Joyce downgraded Sirius XM stock rating to a Sell from a Hold with a price target of $6. Joyce’s price target suggests 4.76% downside potential.
Consensus among analysts is a Moderate Buy based on 3 Buys, 3 Holds, and 1 Sell. The average Sirius XM Holdings price target of $7.36 implies 16.83% upside potential to current levels.
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