Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Sirius XM Stock Is An Auto Recovery Play

By (Jea Yu )Stock MarketsNov 27, 2020 06:36AM ET
Sirius XM Stock Is An Auto Recovery Play
By (Jea Yu )   |  Nov 27, 2020 06:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Satellite radio provider Sirius XM Holdings (NASDAQ: NASDAQ:SIRI) stock was hit hard by the pandemic but shares are creeping back towards it pre-COVID levels. As the restart initiative continues to accelerate with improving auto sales, SiriusXM has the momentum to accelerate its growth with a larger base of out-of-car app users and deeper US auto factory penetration.

Shares are still underperforming the benchmark S&P 500 index but ready to outperform in 2021 as the groundwork has been laid out. As COVID-19 vaccines near FDA approval, commuters set to hit the roads lends to its core business and the rollout of 5G enables more personalized content as its next-gen 360L platform takes shape. Long-term investors looking for a stable pandemic recovery play can look for opportunistic pullbacks for entry into SIRI shares.

Q3 FY 2020 Earnings Release

On Oct. 22, 2020, SiriusXM released its fiscal third-quarter 2020 results for the quarter ending September 2020. The Company reported an earnings-per-share (EPS) profit of $0.06 excluding non-recurring items versus consensus analyst estimates for a profit of $0.05, a $0.01 beat. Revenues grew 0.07% year-over-year (YoY) to $2.02 billion, beating analyst estimates for $1.94 billion.

SiriusXM self-pay grew by 169,000 subscribers in the quarter. Advertising revenue grew 46% sequentially, after falling (-34%) in Q2. September ad revenue is tracking a YoY increase. SiriusXM raised its full-year 2020 revenue guidance to $7.85 billion versus $7.79 billion analyst consensus estimates. The Company increases self-pay net subscriber additions to approximately 800,000. The Company ended the quarter with $1.75 billion of untapped revolver and expects capex in the range of $330 million.

Conference Call Takeaways

SiriusXM CEO, Jim Meyer, ushered in the new CEO Jennifer Wiz. Meyer provided bullish prospects moving forward:

“The business overall has excellent momentum going into year-end. Our new higher guidance now anticipates 2020 revenue, adjusted EBITDA and free cash flow of approximately $7.85 billion, $2.475 billion and $1.6 billion, respectively. We are on track for an extraordinary year.”

Meyers had very productive talks with Howard Stern for a “long-term renewal” of his contract, which he hopes to announce soon. Kevin Hard re-signed for his exclusive audio deal. SiriusXM and Pandora (OTC:PANDY) have resumed live concerts and events, most of them being virtual. Love major sports broadcasting has also resumed including the NBA, MLB playoffs, every NFL game and college football. Pandora’s Modes continues to show growth with 60% adoption for the quarter.

Auto Sales Rebound Drives Installs

Future CEO and current SiriusXM President Jennifer Wiz noted how resilient the business has been wit just a 1.7% churn during the Q2 auto sales slow down during stay-at-home mandates. She summed it with:

“Rebounding auto sales, combined with rising penetration rates mean trial starts are bouncing back too, which sets us up for the fourth quarter and next year. Combined new and used car trial starts were actually up slightly YoY.”

The Company expects to push factory penetration to 80% in coming months. Satellite and streaming allows for more personalization with vastly more content which is the core of the next-gen upgrade 360L platform. Wiz laid out the top growth drivers as, “Improving SiriusXM stream offering, drive out-of-car engagements among existing subscribers and acquire streaming-only subscribers who may not have a need for an in-car subscription.”


On Oct. 14, 2020, SiriusXM announced BMW will feature SiriusXM entertainment service as a standard feature on all models sold in the US starting with model year 2021. On Oct. 30, 2020, SiriusXM announced an expansion of the long-term agreement with Kia Motors America to significantly broaden the installation of SiriusXM throughout KIA models produced in North America. On Nov. 18, 2020, SiriusXM announced a new long-term agreement with NBC Universal News Group. The deal allows for simulcasts of CNBC and MSNBC and TODAY Show Radio to continue to air. The deal makes SiriusXM the exclusive advertising representative and end-to-end tech platform for a broad slate of podcasts for MSNBC, CNBC and NBC News. SiriusXM is evolving into a dominant audio entertainment from anywhere platform with virtually no satellite-based radio competitors. Long-term investors looking for steady growth can monitor opportunistic pullbacks for exposure into this transformational player.

Sirius XM Stock Price Chart
Sirius XM Stock Price Chart

SIRI Opportunistic Pullback Levels

Using the rifle charts on the monthly and weekly time frames enables a broader view of the playing field. The monthly rifle chart has been choppy as evidenced by the pretzel stochastic mini pup. This is a formation that starts with a stochastic crossover down, indicating bearish momentum starting. However, rather than oscillating down, the stochastic oscillator crosses over back up again causing a short-squeeze to flush the bears. This happened on the monthly chart but evidenced clearly on the weekly rifle chart with the stochastic mini pup flushing up through the $5.57 Fibonacci (fib) level triggering the market structure low (MSL) buy.

Currently, the shares are in a breakout that should peak at the weekly upper Bollinger Bands (BBs) to provide opportunistic pullback levels at the $5.89 fib, $5.66 weekly MSL, $5.14 fib and the $4.88 fib in the best case. The upside trajectories range from $7.43 to $9.03 with potential to $11.

Original Post

Sirius XM Stock Is An Auto Recovery Play

Related Articles

Sirius XM Stock Is An Auto Recovery Play

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email