In the most recent trading session, Sirius XM (SIRI) closed at $21.45, indicating a +2.48% shift from the previous trading day.
Satellite radio was cool. Once. Howard Stern's jumping to the platform from terrestrial morning show programming 20 years ago turned heads.
SIRI's Fixed-rate debt sits around ~4.3% and fuels a low-cost capital structure with strong cash flow coverage. SIRI's Satellite spending cuts will unlock roughly 20% more free cash flow by 2026. Management is retiring cheap shares which boosts per-share value and ROIC.
One stock that may look like an obvious buy at first glance is SiriusXM Holdings (SIRI -2.23%). On the surface, it is the sole company granted commercial satellite broadcast rights in the U.S. Moreover, it trades at a low valuation and offers a generous dividend, a likely reason for Warren Buffett's Berkshire Hathaway to hold a 36% stake in the company.
SiriusXM offers an attractive free cash flow yield, with declining capex and improving operational efficiencies driving higher cash conversion. I argue that SiriusXM provides a solid margin of safety, as even if management misses FCF growth targets, the LBO-like nature of the investment could still reward shareholders. Ideas such as low-cost ad-supported SiriusXM Play, announced in July, could help reduce serious decline in revenues, which I believe is the main risk to the investment thesis.
Howard Stern is working with SiriusXM on a new contract at a time when the satellite-radio service has seen a drop in subscribers.
Sirius XM's Q2'25 results show ongoing struggles. However, a deeper look reveals some reason for hope. With pessimism abundantly priced in and no rapid deterioration evident, I continue to believe that SIRI represents an excellent risk/reward.
Stern has been recording from his opulent dwellings because he spent much of his $500 million contract on building a property empire.
While Berkshire Hathaway Inc. (NYSE: BRK-B) was a net seller of stocks in the second quarter, it did just resume acquiring shares of Warren Buffett's favorite media stock.
Sirius XM remains a long-term buy despite mixed Q2 results, with strong non-GAAP earnings and a compelling 5.1% dividend yield. Economic headwinds and tariff-driven ad budget cuts are pressuring both subscription and ad revenues, but Sirius XM retains users through cheaper, ad-supported tiers. Strategic investments in talent and on-demand content, like deals with Stephen A. Smith and Trevor Noah, position Sirius XM for future growth as ad markets recover.
Sirius XM (SIRI 0.55%) isn't often the center of attention, unlike some of its larger media peers, such as Netflix or Spotify.
SIRI's Q2 earnings miss estimates as revenues slip 1.8% Y/Y. However, free cash flow and subscriber losses improve.