It was a disaster at SiriusXM (SIRI), as the satellite radio company and music streamer found itself on the bad end of a lot of bad news. A deep decline in subscriber counts and the accompanying loss in revenue sent Sirius shares into a pit, down over 7.5% in the closing minutes of Thursday’s trading session.
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The numbers were a calamity. The quarter ending June 30 saw around 173,000 subscribers depart the platform during that time frame. That’s around 100,000 self-pay subscribers and 73,000 paid promotional subscribers taking advantage of one of SiriusXM’s promotional offers to give the service a try at a fairly healthy discount.
While this sounds terrible, there was actually a slight bright spot to it all: That massive loss was actually slightly better than the rate of decline from the same time last year. Nevertheless, with churn holding at 1.5%, that still represented a revenue loss of about 5% and a net loss in average revenue per user of around $0.42.
Maintaining Q3 Guidance
There’s a little more good news for Sirius here, such as it is. It’s maintaining its guidance for the third quarter. It expects to make around $8.75 billion for the full year, with free cash flow of around $1.2 billion. That’s slightly less than what some analysts figure, looking for around $8.77 billion. But at that point, you might as well call it “in-line.”
And that’s when an already murky picture gets further muddied. Sirius XM stock has been trading for the last 30 years, yet the latest revenue drop it saw was actually the second worst it has seen…ever. Despite all this, net income was actually up somewhat, and some analysts are even identifying some potential turnaround catalysts. It seems that for every bit of bad news, there’s a bit of good to accompany it.
Is Sirius XM a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SIRI stock based on four Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 33.99% loss in its share price over the past year, the average SIRI price target of $3.86 per share implies 20.25% upside potential.
