Sirius XM’s Q4 Earnings Report & Market Expectations

Sirius XM (NASDAQ: SIRI), a leading provider of satellite radio, is scheduled to announce its fiscal fourth-quarter results on Thursday, February 1. Analysts expect the company to report lower revenues, impacted by headwinds in advertising and a slow recovery in the auto sales industry. The previous quarter saw a decline in subscriber growth and total listening hours, along with the company being heavily in debt at $9.4 billion.

Stock Performance & Market Comparison

SIRI stock has faced a 15% decline from early January 2021, whereas the S&P 500 index has seen a 30% increase over the same period. This poor performance continued over the last three years, with negative returns in each year, causing SIRI to underperform the S&P 500. The comparison stresses the difficulty for individual stocks to consistently beat the market index, as seen in the Consumer Discretionary sector and even for megacap stars like GOOG, MSFT, and AAPL.

2023 Financial Outlook & Market Value

For the full year 2023, SIRI expects total revenue of approximately $9.0 billion, an adjusted EBITDA of approximately $2.75 billion, and a free cash flow outlook of $1.15 billion. Current market valuation indicates the stock price to be around $5, aligning with our forecast.

Financial Projections for Q4 2023

(1) Revenues expected to come slightly below the consensus estimates – Trefis estimates Sirius XM’s Q4 2023 revenues to be around $2.3 billion, slightly lower than the consensus estimate. The company saw flat revenue growth and declined operating expenses in the third quarter of 2023, with a marginal fall in average revenue per user.

(2) EPS likely to match consensus estimates – Sirius XM’s Q4 2023 earnings per share (EPS) is expected to be 8 cents as per Trefis analysis, in line with the consensus estimate. The net income for the third quarter of 2023 improved, resulting in diluted earnings per share of $0.09.

(3) Stock price estimate lower than the current market price – With an EPS estimate of around 31 cents and a P/E multiple of around 14.9x in fiscal 2023, this translates into a price of nearly $5, almost 5% lower than the current market price.

Comparative Performance Metrics

As of January 2024, SIRI has had a 10% decline since early 2023, significantly underperforming the S&P 500 over the same period. This comparison underscores the challenges for the company in staying ahead of the market index.