Have Sirius XM’s Earnings Become More Volatile In The Last Three Years?

+26.26%
Upside
3.90
Market
4.92
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Sirius XM

Sirius XM’s degree of financial leverage has increased consistently in the last three years due to an increase in interest payments owing to a rapid rise in the amount of debt raised. And a higher degree of financial leverage fosters more volatile earnings. Since interest is a fixed expense, leverage magnifies returns and EPS, which isn’t good for a company in cases when interest payments are high.

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Have more questions about Sirius XM? See the links below:

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Sirius XM
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