On Tuesday, Sirius XM (NASDAQ:SIRI) maintained its Buy rating and $4.90 year-end 2024 stock price target from Pivotal Research. The satellite radio company's first-quarter performance showcased self-pay subscriber figures that met expectations, while revenue and EBITDA growth slightly exceeded projections.
The revenue increase of 0.8% was attributed primarily to the company's Pandora (OTC:PANDY) assets, which saw gains from programmatic advertising.
The company reported a 4% rise in EBITDA, surpassing the analyst's initial forecast of no growth. This positive outcome was partially due to stronger performance in areas outside of subscriber numbers. Despite a slight uptick in anticipated subscriber losses for the year 2024, this was balanced by higher average revenue per user (ARPU) and cost savings, resulting in no significant changes to the projections for revenue, EBITDA, or free cash flow for the year.
Pivotal Research's stance on Sirius XM remains positive, with the expectation that investments made in the latter half of 2023 to enhance Sirius XM's out-of-car application and personalized marketing will yield more substantial results in the second half of 2024. These strategic moves are anticipated to contribute to the company's financial and operational metrics in the future.
The $4.90 stock target price for year-end 2024 set by Pivotal Research reflects a steady outlook for Sirius XM, with the firm reiterating its Buy recommendation. This target remains consistent despite the adjustments made to the subscriber loss forecast and the positive impact of ARPU and cost savings adjustments.
In summary, Sirius XM has managed to meet expectations for subscriber numbers while slightly exceeding revenue and EBITDA growth projections in the first quarter, thanks to its Pandora assets. Pivotal Research continues to support the stock with a Buy rating and a stable year-end 2024 price target, expecting future benefits from the company's ongoing investments.
InvestingPro Insights
As Sirius XM (NASDAQ:SIRI) continues to navigate the competitive audio entertainment landscape, recent data from InvestingPro provides a deeper financial perspective on the company. With a current market capitalization of $11.44 billion, and a P/E ratio standing at 9.19, Sirius XM exhibits a valuation that is intriguing when juxtaposed against its near-term earnings growth potential.
The company's price-to-earnings ratio, adjusted for the last twelve months as of Q4 2023, is slightly lower at 8.67, hinting at a potentially more favorable assessment by the market of its earnings capacity.
InvestingPro Tips highlight a few key points: Sirius XM is trading near its 52-week low, which could be a point of interest for value-seeking investors. The stock has experienced a notable decline over the last three months, with a 37.39% drop in price total return.
This could suggest a potential opportunity for investors if they believe in the company's ability to rebound. Furthermore, analysts predict the company will stay profitable this year, which is supported by a solid track record of profitability over the last twelve months.
For those looking to dive deeper, there are additional InvestingPro Tips available, which can be accessed at https://www.investing.com/pro/SIRI. Readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking more comprehensive analytics and insights that could help in making more informed investment decisions.
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