Sirius XM (SIRI) Up 4.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Sirius XM (SIRI). Shares have added about 4.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sirius XM due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sirius XM Q3 Earnings Beat Estimates, Revenues Miss
Sirius XM Holdings reported third-quarter 2023 earnings of 9 cents per share, which beat the Zacks Consensus Estimate by 12.5% and increased 50% year over year.
Total revenues on a reported basis declined 0.4% year over year to $2.27 billion and missed the consensus mark by 0.71%.
Subscriber revenues (76.1% of total revenues) declined 0.3% from the year-ago quarter to $1.72 billion. The figure missed the Zacks Consensus Estimate by 0.71%.
Meanwhile, advertisement revenues (20.3%) gained 0.7% year over year to $460 million. The figure beat the Zacks Consensus Estimate by 2.21%.
Equipment revenues (2.2% of total revenues) decreased 2% year over year to $49 million. The figure beat the Zacks Consensus Estimate by 3.12%.
Other revenues (1.5% of total revenues) decreased 15.4% from the year-ago quarter to $33 million and missed the Zacks Consensus Estimate by 15.28%.
Sirius XM Standalone Details
Sirius XM segment revenues (75.8% of total revenues) were $1.72 billion, down 1.2% year over year.
Total subscriber base declined 0.6% year over year to 33.96 million, missing the Zacks Consensus Estimate by 0.09%.
Revenues witnessed a decline due to a 0.2% drop in average revenue per user, which amounted to $15.69. The figure missed the Zacks Consensus Estimate by 1.73%.
Subscriber revenues decreased 0.4% year over year to $1.59 billion. Advertising revenues were $42 million, down 16% year over year. Equipment revenues declined 2% year over year to $49 million. Other revenues decreased 15.4% year over year to $33 million.
Self-pay subscribers increased 3% year over year to 31.81 million. Net subscriber loss in the reported quarter was 94K compared with net additions of 138K in the year-ago period.
Pandora & OFF Platform Details
Pandora and OFF platform’s revenues (24.2% of total revenues) gained 2.2% year over year to $550 million, owing to a 2.7% increase in advertising revenues that totaled $418 million and subscriber revenues that improved 0.8% year over year to $132 million.
Self-pay subscribers of the Pandora Plus and Pandora Premium services decreased modestly in the third quarter of 2023 to end the period at 6.1 million.
Total subscribers decreased by 2.4% year over year, ending the third quarter at 6.11 million. The figure missed the Zacks Consensus Estimate by 1.45%.
Total ad-supported listener hours were 2.64 billion in the third quarter, down 4% year over year. Advertising revenue per thousand listener hours were $104.33, up 1% year over year.
Operating Details
In the third quarter, total operating expenses decreased 5.8% year over year to $1.7 billion.
Adjusted EBITDA increased 3.8% year over year to $747 million.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash and cash equivalents were $53 million compared with $51 million as of Jun 30, 2023.
The long-term debt, as of Sep 30, 2023, was $8.82 billion compared with $8.9 billion as of Jun 30, 2023.
For the third quarter, cash flow from operations was $478 million compared with $412 million in the year-ago quarter.
Free cash flow was $291 million for the third quarter of 2023, down from $329 million in the prior-year period.
2023 Guidance
Revenues are expected to be $9 billion. Adjusted EBITDA is expected to be $2.75 billion. Free cash flow is expected to be $1.15 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -7.96% due to these changes.
VGM Scores
At this time, Sirius XM has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Sirius XM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Sirius XM belongs to the Zacks Broadcast Radio and Television industry. Another stock from the same industry, Netflix (NFLX), has gained 13.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Netflix reported revenues of $8.54 billion in the last reported quarter, representing a year-over-year change of +7.8%. EPS of $3.73 for the same period compares with $3.10 a year ago.
For the current quarter, Netflix is expected to post earnings of $2.18 per share, indicating a change of +1716.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Netflix has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Sirius XM Holdings Inc. (SIRI) : Free Stock Analysis Report
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