Sattelite and online radio company SiriusXM (SIRI) disappointed investors with a 2025 outlook that was included alongside a strategic update and other changes. This has it expecting revenue of $8.5 billion, adjusted EBITDA of $2.6 billion, and free cash flow of $1.15 billion during the year. The major damage here comes from that revenue guidance, which is below Wall Street’s estimate of $8.74 billion.
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This updated guidance was provided alongside plans to produce a leaner SiriusXM. The company intends to focus on its core subscription and advertising businesses to reach this goal. To help with this, SiriusXM announced Wayne Thorsen as its new Executive Vice President and Chief Operating Officer. The COO role was created for Thorsen, who brings experience as the former Executive Vice President and Chief Business Officer at ADT Inc. (ADT).
SiriusXM also reaffirmed its 2024 revenue guidance of $8.675 billion in this update. That’s another negative for SIRI shareholders as it falls just short of Wall Street’s revenue estimate of $8.68 billion.
How This Affects SIRI Stock
Investors aren’t reacting well to the updated revenue guidance, dragging SIRI stock down 10.3% as of this writing. That builds on a 50.39% drop year-to-date and a 45.94% decrease over the past 12 months. It could also weigh down the company’s shares over the next year.
SiriusXM’s revenue outlook today reaffirms three-star J.P. Morgan analyst Sebastiano Petti’s opinions on the company. He reiterated a Sell rating last month, arguing that SIRI is facing revenue pressures due to lowered subscriber plans and dwindling advertiser demand. This comes with a $21 price target, representing a potential 20.03% downside.
Is SIRI Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for SiriusXM is Hold based on five Buy, four Hold, and five Sell ratings over the last three months. With that comes an average price target of $28.71, a high of $43, and a low of $21. This represents a potential 10.85% upside for SIRI shares.
