Now Is Not The Time To Buy Sirius XM Stock
Sirius XM Holdings stock (NASDAQ: SIRI) declined 7% year-to-date, in line with the broader market downturn, as the S&P 500 also dropped 7%. The company reported Q1 earnings per share of $0.59, representing a 6% year-over-year (y-o-y) decline and falling short of analyst expectations of $0.67. Revenue for the quarter was $2.07 billion, down 4% y-o-y and slightly below the projected $2.08 billion. SiriusXM continues to undergo a strategic transition, focusing on cost optimization and digital audio growth amid ongoing subscriber attrition. The company has made notable progress in its cost reduction efforts, with total operating expenses down 4% y-o-y. The most significant reductions were seen in Sales & Marketing (down 19%) and Product & Technology (down 15%), reflecting a clear emphasis on operational efficiency. On the subscriber front, self-pay subscriptions fell 1% y-o-y to approximately 31.34 million, though this decline marked a 16% improvement compared to the first quarter of 2024. However, paid promotional subscribers and paid accounts in Canada declined by a combined total of 439,000.
Image by Dominic Flamini from Pixabay
How does Sirius XM’s valuation look vs. the S&P 500?
Going by what you pay per dollar of sales or profit, SIRI stock looks cheap compared to the broader market.
• Sirius XM has a price-to-sales (P/S) ratio of 0.9 vs. a figure of 2.8 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 4.3 compared to 17.6 for S&P 500
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How have Sirius XM’s revenues grown over recent years?
Sirius XM’s Revenues have seen a decline over recent years.
• Sirius XM’s top line has remained flat over the last 3 years (vs. increase of 6.2% for S&P 500)
• Its revenues have declined 2.8% from $9.0 Bil to $8.7 Bil in the last 12 months (vs. growth of 5.3% for S&P 500)
• Also, its quarterly revenues decreased 4.4% to $2.1 Bil in the most recent quarter from $2.1 Bil a year ago (vs. 4.9% improvement for S&P 500)
How profitable is SIRI?
Sirius XM’s profit margins are worse than most companies in the Trefis coverage universe.
• Sirius XM’s Operating Income over the last four quarters was $1.9 Bil, which represents a moderate Operating Margin of 22.3% (vs. 13.1% for S&P 500)
• Sirius XM’s Operating Cash Flow (OCF) over this period was $1.7 Bil, pointing to a moderate OCF Margin of 20.0% (vs. 15.7% for S&P 500)
• For the last four-quarter period, Sirius XM’s Net Income was $-1.7 Bil – indicating a very poor Net Income Margin of -19.1% (vs. 11.3% for S&P 500)
Does Sirius XM look financially stable?
Sirius XM’s balance sheet looks very weak.
• Sirius XM’s Debt figure was $10 Bil at the end of the most recent quarter, while its market capitalization is $7.0 Bil (as of 5/2/2025). This implies a very poor Debt-to-Equity Ratio of 140.0% (vs. 21.5% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $162 Mil of the $28 Bil in Total Assets for Sirius XM. This yields a very poor Cash-to-Assets Ratio of 0.6% (vs. 15.0% for S&P 500)
How resilient is SIRI stock during a downturn?
SIRI stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• SIRI stock fell 49.6% from a high of $67.80 on 12 August 2022 to $34.20 on 9 May 2023, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 20 July 2023
• Since then, the stock has increased to a high of $78.10 on 20 July 2023 and currently trades at around $20
Covid Pandemic (2020)
• SIRI stock fell 39.5% from a high of $73.40 on 20 February 2020 to $44.40 on 20 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 20 July 2023
Global Financial Crisis (2008)
• SIRI stock fell 98.7% from a high of $41.50 on 16 January 2007 to $0.55 on 11 February 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 4 November 2015
Putting all the pieces together: What it means for SIRI stock
In summary, Sirius XM’s performance across the parameters detailed above are as follows:
• Growth: Weak
• Profitability: Weak
• Financial Stability: Extremely Weak
• Downturn Resilience: Very Weak
• Overall: Very Weak
Based on the above parameters and keeping in mind the company’s very low valuation, we think that the stock is unattractive, which supports our conclusion that SIRI is a bad stock to buy.
While you would do well to avoid SIRI stock for now, you could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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