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Recent Action On Sirius XM (SIRI) Radio Stock

 August 04, 2011 10:12 AM
 


Sirius XM (SIRI) Radio reported their second quarter earnings for the year on Tuesday. Results managed to beat market consensus and here's a look at analyst actions on the stock preceding and following its earnings report.

  • David Bank, analyst at RBC Capital raised his price target on SIRI from $1.50 to $2.00 in a research note yesterday. He re-iterated his Sector Perform rating on SIRI indicating a relatively neutral stance on the stock which is currently priced at $2.07.

The analyst also raised his per user revenue estimates for fiscal year 2011 and alluded towards the possibility of the company paying dividends by 2012.

[Related -Sirius XM Holdings Inc. (SIRI): Turning The Dial To $4.20 Per Share?]

 

  • Barton Crockett from Lazard Capital yesterday reiterated his Neutral rating on Sirius XM Radio. The analysts expects the company to perform better in 2012 saying that  revenue and margin growth would continue "toward a long-term goal of 40%+"

However, car sales are showing signs of slowing based on June's data and this could affect Sirius XM's near-term results.

  • TheStreet Ratings today upgraded the company's stock from Hold to Buy in a report. The report states that the company's net income and revenues have grown at a compelling pace. In addition, the company has been able to grow its return of equity at a rate faster than its industry or the broader S&P 500.

After a string of losses, Sirius XM has been able to return to profitability and TheStreet Ratings believes that the company's present growth trajectory should continue going forward.

  • Craig Hodges, fund manager at Hodges Fund (HDPMX) said on Monday that he believes that SIRI's stock price could appreciate by 3 or 4 times to between $6 and $8 in the next three years. Hodges stated, "They can add subscribers without adding costs. They have incredible economies of scale, which is the beauty of it."

[Related -Sirius XM Radio Inc (SIRI) Q3 Earnings Preview: Turning Down The Dial]

Sirius XM's subscriber base has expanded well thanks to the OEM partnerships that it has with automobile manufacturers. Hodges thinks that subscriber growth can be strengthened further if Sirius XM is able to capitalize on the used car market as well.

The fund manager also believes that competitors like Pandora and other music services are not a massive threat to Sirius XM and that fears of competition have been "overblown". He states that Sirius XM has a superior advertising model which translates to better bottom-line performance as subscribers grow.

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