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Sirius XM Holdings (NASDAQ: SIRI) was a resounding success after being far from reaching Wednesday's Wall Street business and profit targets, but at least one Wall Street professional views the slippage as a buying opportunity . Jeffrey Wlodarczak, of Pivotal Research, upgraded on Thursday, arguing that the 7% pay-for-sale the day before yesterday was excessive.
Wlodarczak raises his rating on the satellite radio provider from "keep" to "buy". He believes Sirius XM is already making significant progress in monetizing the acquisition of Pandora Media, which was finalized almost three months ago. The analyst believes that last week's report – while not perfect given slightly lower expectations for new car installations and net additions of self-paid subscribers for 2019 – does not remove the potential for long-term Sirius XM.
Source of image: Sirius XM Holdings.
Lucky number seven
Wlodarczak is sticking to his previous goal of $ 7 on stocks, and that's not a problem. It was understandable to be neutral with a target of $ 7 when stocks traded above that mark in the spring and early summer, but with a track record well below that mark, it represents 21% of up from current levels.
Some will say that the upgrade of Wlodarczak is hollow because it only plays into the sale, but it's a good thing for the bullish side. He could have just kept his score neutral and lowered his price target to $ 6, or slightly less.
Sirius XM Holdings is in a better place than suggested last week's sale. He now has an audience of over 100 million people north of his department. Pay listeners now account for just over a third of this figure – there are more than 29 million subscribers to self-pay satellite radio, as well as an additional 6.2 million listeners in Pandora – but even Free users of Sirius XM trial subscription users import. Users listening for free Pandora and people with satellite radio test plans are the ideal target audience for growth in the number of premium subscribers.
Satellite radio will continue to be the driving force here, and the platform continues to show improvement, with constant churn and average revenue per user in record growth. Sirius XM expects its receivers to be deployed on 80% of new cars sold next year, and a deeper penetration into the new vehicles will eventually end up in the car market. opportunity. There are now 119 million cars on the road equipped with satellite receivers, 11% more than a year ago – but that's only 45% of the total car market. Growth opportunities will continue to come even though auto sales are slow.
Sirius XM may have lost favor, but with a new bull on Wall Street and countless more opportunistic investors considering last week's sale as a buying opportunity, the stock may not stay not so long ago.
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