Sirius Q2 Earnings: What Are We Watching?

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SIRI: Sirius XM logo
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Sirius XM

Sirius XM (NASDAQ: SIRI), a leading provider of satellite radio, is scheduled to announce its fiscal second-quarter results on Tuesday, August 1. We expect Sirius XM stock to likely see little movement with revenue beating market expectations and earnings coming in line. It should be noted that the media company benefits from a historically meager churn rate, with an implied average life for new car purchases of around five years – thanks to its solid business model. By taking advantage of the advertising reach it receives through radio, Sirius XM could likely push Pandora into podcasting for further growth opportunities in the coming quarters. It should be noted that the company’s self-pay subscribers of the Pandora Plus and Pandora Premium services fell by 2% year-over-year (y-o-y) to end Q1 at 6.2 million, while SiriusXM self-pay subscribers remained flat at 32 million. In comparison, the company had 30 million self-pay subscribers at the start of 2020. A reduced marketing spend, particularly around streaming, contributed to the negative subscriber growth in Q1 2023. High car prices and lofty gas prices also weighed on Q1 results.

For the full-year 2023, the company expects total revenue of approximately $9.0 billion, adjusted EBITDA of approximately $2.75 billion, and free cash flow of approximately $1.1 billion in FY 2023 (compared to $1.55 billion in 2022).

Our forecast indicates that Sirius XM’s valuation is nearly $5 per share, which is 4% higher than the current market price. Look at our interactive dashboard analysis on Sirius Earnings Preview: What To Expect in Q2? for more details.

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(1) Revenues expected to be slightly above the consensus estimates

Trefis estimates Sirius XM’s Q2 2023 revenues to be around $2.3 Bil, marginally above the consensus estimate. Sirius XM’s revenue fell 2% year-over-year (y-o-y) to $2.14 billion. For the full year 2023, we forecast Sirius Revenues to be $9.1 billion, up 0.6% y-o-y.

(2) EPS likely to match consensus estimates comfortably

Sirius XM’s Q2 2023 earnings per share (EPS) is expected to be 8 cents as per Trefis analysis, higher than the consensus estimate of 7 cents. SIRI’s net income for the first quarter of 2022 was $233 million resulting in diluted earnings per share of $0.06, down from $0.08 for the same quarter of 2022.

(3) Stock price estimate in line with the current market price

Going by our Sirius XM’s Valuation, with an EPS estimate of around 31 cents and a P/E multiple of around 15.3x in fiscal 2023, this translates into a price of nearly $5, in line with the current market price.

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.

What if you’re looking for a portfolio that aims for long-term growth? Here’s a value portfolio that’s done much better than the market since 2016.

Returns Jul 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 SIRI Return 6% -18% 8%
 S&P 500 Return 2% 18% 103%
 Trefis Multi-Strategy Portfolio 6% 25% 303%

[1] Month-to-date and year-to-date as of 7/28/2023
[2] Cumulative total returns since the end of 2016

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