Sirius XM is set to announce its fiscal second-quarter results on August 1, with expectations of lower stock trading due to revenues beating and earnings missing market expectations. The stock has declined 34% year-to-date and hovers around $3, significantly below its historical range of $5-$7. The company faces challenges in the auto sales industry and struggles to stabilize Pandora’s user base, all while carrying a heavy debt of $9.4 billion.
The company has forecasted total revenue of $8.75 billion, adjusted EBITDA of $2.7 billion, and $1.2 billion in free cash flow for the full year 2024. Despite a setback due to the pandemic, Sirius XM aims to focus on its content to compete and grow its business. However, the stock has seen a sharp decline of 35% in recent years compared to a 45% increase in the S&P 500, underperforming the market consistently.
Struggling to beat the S&P 500 in recent years, Sirius XM faces uncertainty in the current macroeconomic environment with high oil prices and elevated interest rates. The company’s valuation is forecasted at $3 per share, 15% lower than the current market price. Sirius XM’s revenues are expected to fall below consensus estimates for the second quarter of 2024, with subscriber base growth challenges impacting the overall revenue.
The company’s earnings per share for the second quarter are projected to miss consensus estimates, with expected EPS of 7 cents. Despite a 4% year-over-year increase in adjusted EBITDA in the first quarter of 2024, Sirius XM continues to face challenges in growing its subscriber base. The stock price estimate is lower than the current market price, with a potential price of $3 based on Trefis’ valuation analysis.
Overall, Sirius XM’s performance in recent years has underperformed the market, facing challenges in various sectors including subscriber growth and debt management. The company’s second-quarter results are anticipated to reflect these challenges, with revenues and earnings likely to fall short of market expectations. Sirius XM will need to focus on improving its content and subscriber base to remain competitive in the satellite radio industry.
