Why Is Sirius XM (SIRI) Up 7.5% Since the Last Earnings Report?
It has been about a month since the last earnings report for Sirius XM Holdings Inc. SIRI. Shares have added about 7.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fourth Quarter Earnings
Sirius XM reported fourth-quarter 2016 financial numbers wherein the bottom line met the Zacks Consensus Estimate while the top line surpassed the same. Earnings were in line with the Zacks Consensus Estimate of $0.04 per share but improved on a year over year basis. Total revenue of $1.3 billion grew 9% year over year and also surpassed the Zacks Consensus Estimate of $1.28 billion. Subscriber revenues grew 8.5% to $1.1 billion. Advertising revenues climbed 16.2% to $38.9 million. Equipment revenues climbed 5.6% while revenues from other sources increased 10.7%. Operating expenses climbed 7.9% to $973.4 million in the reported quarter. The company added over 1.75 million net new subscribers in2016, ending the year with approximately 31.3 million subscribers. Self-pay net subscriber additions in 2016 were 1.66 million. Annual revenue increased 10% to a record $5 billion on the back of a 6% increase in subscribers and a 3% increase in average revenue per user .
Adjusted EBITDA climbed 13% in 2016 to touch a record of $1.88 billion.The company expects Self-pay net subscriber additions of approximately 1.3 million in 2017. Revenues in 2017 are expected at approximately $5.3 billion. Adjusted EBITDA and free cash flow are projected at approximately $2.025 billion, and $1.5 billion respectively.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted 15.79% downward due to these changes.
Sirius XM Holdings Inc. Price and Consensus
Sirius XM Holdings Inc. Price and Consensus | Sirius XM Holdings Inc. Quote
VGM Scores
At this time, Sirius XM's stock has a great Growth Score of 'A', though it is lagging a bit on the momentum front with a 'B'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Sirius XM Holdings Inc. (SIRI): Free Stock Analysis Report
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