Sirius XM (NASDAQ: SIRI), a leading provider of satellite radio, is scheduled to announce its fiscal first-quarter results on Thursday, April 28. We expect Sirius XM stock to likely trade higher due to better-than-expected Q1 results with revenue and earnings both beating market expectations. The company has a long history of providing conservative guidance for revenue, self-pay net subscriber additions, free cash flow, and adjusted EBITDA. The satellite radio company typically raises those guidance figures throughout the year as it did throughout 2021. For the full year 2022, Sirius expects self-pay net subscriber additions of approximately 500,000, total revenue of approximately $9 billion, adjusted EBITDA of $2.8 billion, and free cash flow of over $1.6 billion.
The number of outstanding shares for Sirius XM has fallen to nearly 4 billion from close to 6 billion in 2012. The company has a large number of outstanding shares, which makes its stock trade at a low price. Last year, Sirius XM generated $1.83 billion in free cash flow, and it returned most of that to shareholders through dividends and – more important for its share price – stock buybacks.
Our forecast indicates that Sirius XM’s valuation is around $7 per share, which is above the current market price of $6. Look at our interactive dashboard analysis on Sirius Earnings Preview: What To Expect in Q1? for more details.
(1) Revenues expected to be slightly above the consensus estimates
Trefis estimates Sirius XM’s Q1 2022 revenues to be around $2.2 Bil, marginally ahead of the consensus estimate. The company surpassed consensus expectations on the top and bottom lines in its Q4 earnings. SIRI reported revenues of $2.3 billion, up 4% year-over-year (y-o-y) in the fourth quarter. In 2021, SIRI added 1.15 million net new self-pay subscribers, up 27% y-o-y, to land at a record 32 million. Total subscribers reached 34 million and paid promotional subs fell by 1.83 million, due to continuing impacts of new vehicle trial structures with certain automakers, as well as lower vehicle shipments due to reported semiconductor supply shortages. In addition, self-pay monthly churn for the full year improved by about 5 basis points, to 1.6%. For the full year, we forecast Sirius Revenues to be $9 billion, up 4% y-o-y.
(2) EPS likely to beat consensus estimates comfortably
Sirius XM’s Q1 2022 earnings per share (EPS) is expected to be 9 cents as per Trefis analysis, higher than the consensus estimate of 8 cents. The company swung to a net profit of $318 million (or 8 cents) from a year-ago loss of $677 million (or -$0.16) in Q4. Pandora’s non-cash impairment of $976 million in Q4 2020 impacted that quarter.
(3) Stock price estimate higher than the current market price
Going by our Sirius XM’s Valuation, with an EPS estimate of around 32 cents and a P/E multiple of around 21.5x in fiscal 2022, this translates into a price of almost $7.
Note: P/E Multiples are based on Share Price at the end of the year, and reported (or expected) Adjusted Earnings for the full year
It is helpful to see how its peers stack up. SIRI Peers shows how Sirius stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
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|Trefis Multi-Strategy Portfolio||-8%||-15%||233%|
 Month-to-date and year-to-date as of 4/27/2022
 Cumulative total returns since the end of 2016