Why Sirius XM Faces Challenges Amidst Streaming Competition
Sirius XM (SIRI) has seen its shares drop by 42.3% over the past 12 months, significantly underperforming the Zacks Consumer Discretionary sector, which declined by just 10.9%. In stark contrast, the Zacks Broadcast Radio and Television industry has experienced a 29.1% increase during the same period.
The primary reason behind this underperformance is Sirius XM’s decline in subscriber revenues and sluggish subscriber growth. Increased competition in the streaming market from major players, including Apple (AAPL), Spotify (SPOT), and Amazon (AMZN), has negatively impacted its momentum. Apple has bolstered its music streaming capabilities by acquiring Shazam and Asaii. Spotify has formed partnerships with Samsung and Google to enhance its subscriber base, while Amazon provides Prime Music, granting access to over 100 million songs for Prime members. Over the last year, shares of Apple and Spotify have gained 11.9% and an impressive 62.9%, respectively, although Amazon has seen a 7.7% decline.
To cope with the competitive landscape, SIRI is strategically focusing on broadcasting. The company is enhancing its position by pursuing partnerships with automakers such as Tesla and prioritizing premium, exclusive content aimed at fostering long-term growth. Now, let’s delve into the specific steps SIRI is taking to implement this strategy.
Expanding Broadcasting Coverage
Sirius XM has announced its plans for a comprehensive broadcast during Masters Week, from April 5 to 13. As the exclusive audio broadcaster for the Masters Tournament, Sirius XM will provide live coverage of all four days, along with daily talk shows and specials for listeners across North America. This initiative could enhance the company’s subscription revenues by attracting more golf enthusiasts to its platform.
Sirius XM Holdings Inc. Price and Consensus
Sirius XM Holdings Inc. price-consensus-chart | Sirius XM Holdings Inc. Quote
In addition to its golf coverage, SIRI is set to offer extensive audio programming for the 2025 Major League Baseball (MLB) season. Subscribers will gain access to every regular season and postseason game, alongside in-depth analysis available on the exclusive MLB Network Radio channel.
Moreover, Sirius XM has extended its broadcasting agreement with Formula 1 (F1). The multi-year deal ensures that the company will continue its coverage of all F1 races in North America through 2027. Additionally, Sirius XM is providing nationwide coverage for NCAA March Madness, catering specifically to basketball fans.
These initiatives demonstrate Sirius XM’s dedication to increasing audience engagement within key sectors. By focusing on exclusive content and forming strategic partnerships, the company aims to solidify its growth trajectory in attracting loyal niche markets, particularly sports fans.
Earnings Estimate Revisions Reflect Positive Outlook
The Zacks Consensus Estimate for SIRI’s first-quarter 2025 earnings has risen to 70 cents per share, representing an 11.11% improvement over the last 90 days, with no change year-over-year anticipated.
The revenue consensus stands at $2.08 billion, reflecting a projected year-over-year decrease of 3.58%.
SIRI has outperformed the Zacks Consensus Estimate for earnings in two of the last four quarters, falling short once and matching expectations once, with an average negative surprise of 41.41%.
Find the latest EPS estimates and surprises on Zacks earnings Calendar.
SIRI Stock: Should You Buy, Sell, or Hold?
Confidence in SIRI’s long-term prospects is robust, driven by its strategic investments aimed at diversifying and expanding content offerings. The company continues to enhance its platform by delivering a variety of materials across music, politics, news, and sports. Notably, Sirius XM faces no direct competition from other satellite radio operators in the U.S., reducing the risk of new entrants looking to establish a similar presence. Its subscription-based model effectively contributes to a steady revenue stream.
SIRI currently holds a Zacks Rank #2 (Buy), indicating a promising entry point for investors interested in this Stock. For more insights, you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
