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Sirius XM Holdings Inc. Message Board

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  • sirius_squeeze sirius_squeeze Mar 16, 2012 2:50 PM Flag

    $100 PER SHARE: A TIMELINE

    At 25-100 per share you would still have a market cap of 78.125 - 312.5 Billion dollars.

    ***********************

    Which is par for a media company with global penetration via a giant telecomm like Verizon. 78 billion seems about right but this will trade ahead of itself on speculation and high growth rate. There is no saturation in sight on the satellite spectrum. Diff. story with wireless bandwidth.

    Squeeze

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    • The fact that it is a media company is irrelevant, no such thing as "par for a media company". A stocks valuation is based on its earnings power and its future earnings potential. ROI, ROE, Cash Flow, Profit do factor into a stocks valuation. If you were out looking to buy a house today and the current market value of the house is 240k, would you pay 850k for the house because in the future it could be worth 10 million because it will be surrounded by a future city? No way to measure that. You would not even pay 300k for the house, you would try to buy the house for under market value to get a good deal, say 230-235k.

      To sustain a market cap of 78 Billion Sirius XM would need to be generating or would be generate in the foreseeable future 5.2 billion a year in free cash flow at 15:1. At 20:1 the free cash flow would need to be 3.9 billion.

      No way Sirius XM will grow their free cash flow to 3.9-5.2 billion a year in 5 years. That means they would need to increase their cash flow 400-600% in three years. We would need over 60-80 million subscribers. What is going to happen in the next 3 years that will spur that kind of growth? or How much more would the price need to go up over 3 years to get the top line revenue up over 9 billion.

      Only way that happens in 3 years is HYPER INFLATION and at that point minimum wage would be 25 bucks or more an hour.

      • 3 Replies to lukb4ujump
      • LUK........you are correct!

        Under normal circumstances there is no way SIRI would grow that quickly or at that pace. But it is growing and it will continue to climb!

        The only way the $100 scenario plays out that quickly is for SIRI to expand world wide. The Hispanic and Asian market would do it.............is it possible............could be...........LOL

        For right now I'll take $6.20 and retire on shorties misses!!!!!!!!! LOL

      • Accelerated global growth via smart phones is more of a precise projection than the construction of an entire city.

        And why is 4 billion in revenue in 2015 so far-fetched?

        We're grossing 3 billion now. We'll have 1.5 FCF in 2012. Is it really going to take that long to pay off the rest and boost revenues 1 billion more by 2015?

        Mel said 75 million radios on the road by 2015 and the acquisition cost is dwindling because of the used car market where the radios were already paid for.

        Plus you left out the spike in ad revenue with a free ad-based version, a Pandora BK and a Clear Channel BK.

        Squeeze

      • devildtails@ymail.com devildtails Mar 16, 2012 3:48 PM Flag

        The fact that it is a media company is irrelevant, no such thing as "par for a media company". A stocks valuation is based on its earnings power and its future earnings potential. ROI, ROE, Cash Flow, Profit do factor into a stocks valuation. If you were out looking to buy a house today and the current market value of the house is 240k, would you pay 850k for the house because in the future it could be worth 10 million because it will be surrounded by a future city? No way to measure that. You would not even pay 300k for the house, you would try to buy the house for under market value to get a good deal, say 230-235k.

        To sustain a market cap of 78 Billion Sirius XM would need to be generating or would be generate in the foreseeable future 5.2 billion a year in free cash flow at 15:1. At 20:1 the free cash flow would need to be 3.9 billion.

        No way Sirius XM will grow their free cash flow to 3.9-5.2 billion a year in 5 years. That means they would need to increase their cash flow 400-600% in three years. We would need over 60-80 million subscribers. What is going to happen in the next 3 years that will spur that kind of growth? or How much more would the price need to go up over 3 years to get the top line revenue up over 9 billion.

        Only way that happens in 3 years is HYPER INFLATION and at that point minimum wage would be 25 bucks or more an hour.
        ********************************************

        Hey lukb4, your version is conservative; way too conservative. Stock markets don't work by fundamentals alone. Indeed market participants speculate where the growth is going to be and run stocks up and down based on what they anticipate. If Sirius XM deploys a global IP-device expansion program--partnered with the likes of Apple, Verizon, AT&T, Clear Channel, DirecTV, Liberty Media-- you can bet speculators will pounce on this stock like there is no tomorrow. Add to that the short squeeze from such a development. And on top of all that, if the company announces follow through and delivers on guidance from such a program, the numbers talked about in this thread could certainly happen. And yes, they could even happen by 2015 depending how rapidly a program like this is rolled out. You don't have to like the analysis, but at least acknowledging it would demonstrate you are inline with realistic outcomes.

    • VZ does 111 Billion a year in revenue.
      112 Billion market cap
      2.84 Billioin shares outstanding
      35.3 Billion in EBITDA
      2.4 Billion available to common.
      Pays 2 bucks a share dividend, a 5.1% yield.

      Not even in the same ballpark today, could we get there? It is going to take more then 3 years to get there I believe.

      2012
      1.5 Billion end of 2012 - 300 million pay down debt
      1.2 Billion ending cash position
      2.7 Billion ending debt position
      6.35 Billion shares (3.76 Billion + Liberty 2.59 Billion)


      2013
      1.2 Billion starting cash position
      1.0 Billion in free cash flow
      2.2 Billion end of 2012 - 778.5 million takes out the 2013 toxic debt, now buy backs are not restricted.
      1.42 Billion - 750 million share buy back 2.75
      672 Million ending cash position
      1.95 Billion ending debt
      6.08 Billion shares (3.49 Billion + Liberty 2.59 Billion)


      2014
      672 Million starting cash position
      1.3 Billion in free cash flow
      1.972 Billion end of year - 550 million note 2014
      1.422 Billion - 750 million share buy back at 3 bucks
      672 Million ending cash position.
      1.4 Billing ending debt
      5.83 Billion shares (3.24 Billion + Liberty 2.59 Billion)

      2015
      672 Million starting cash position
      1.7 Billion in free cash flow
      2.372 Billion end of year - 800 million debt 2015 8.75% Senior
      1.572 Billion - 750 million share buy back 4 bucks
      822 Milled ending cash
      600 Million ending debt
      5.64 Billion shares (3.05 Billion + Liberty 2.59 Billion)

      In 2015 with price of 4 dollars a share, SIRI would have a 22.56 Billion market cap, or 22.56:1 Price/Cash Flow.

      I just don't see your 78 Billion, in three years...

 
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