SIRI changes

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View the full Oct 31, 2026 version

Price: $26.97 → $29.01(+7.6%)
Discount category: Below intrinsic value → Close to intrinsic value
Next earnings: Oct 29, 2026 → Jan 29, 2027
Next earnings is estimate: No → Yes
Thesis: The market prices Sirius XM for a slow loss of subscribers and listeners to free and paid streaming services in connected cars. Revenue removed: grew only 1% added: fell slightly in removed: Q2 added: Q3 2026, SiriusXM segment revenue was added: about flat, and Pandora monthly active users fell removed: 7% to added: 38.8 million from 39.8 removed: million. added: million at June 30, 2026. Many investors believe that the satellite radio model will shrink as car dashboards add apps such as Spotify and YouTube. The company also has net debt of removed: 3.4 added: 3.3 times adjusted EBITDA. Its recent results are better: removed: in Q2 2026, self-pay subscribers grew by about removed: 22,000, the first added: 22,000 in Q2 removed: growth added: 2026 and about 5,000 in removed: four years, added: Q3, churn removed: fell to added: stayed near 1.5% a removed: record low of about 1.4% a month, and free cash flow removed: rose 48% to $593 million. added: was about $1.1 billion in the first nine months of 2026. For the gap to close, three things must be true. Self-pay subscribers must stay stable or grow through 2026 and 2027, helped by companion subscriptions and the continuous service plan. The company must meet its removed: raised added: twice-raised 2026 guidance of about removed: $2.625 added: $2.65 billion of adjusted EBITDA and removed: $1.375 added: $1.40 billion of free cash flow. It must use the cash for dividends, buybacks and debt repayment while leverage stays near removed: 3.4 times. added: 3.3 times, and it plans to buy back much more stock in 2027. The removed: Q3 2026 added: full-year report removed: on October 29, 2026, and the 2027 guidance in early 2027 give the removed: tests. added: next test. If these checks pass, the gap can close over the next four to eight quarters. The main reason it may not close is a faster loss of listeners in the car to streaming services, which the company cannot fully control.
Risks: Streaming services such as Spotify, Apple Music and YouTube are now easy to use in connected cars. If fewer car buyers convert from trials to paid plans, or more subscribers cancel, revenue falls. The trial funnel was removed: 7.5 added: 7.4 million at removed: June added: September 30, 2026, removed: slightly lower than added: the same as a year removed: earlier. added: earlier, and conversion rates fell in Q3 2026. Pandora monthly active users fell removed: 7% in the year to added: 38.8 million at September 30, 2026, from 39.8 million at June 30, 2026. A further loss of listeners lowers advertising revenue in the Pandora and Off-Platform segment. removed: Total debt added: Debt principal was removed: $9.43 added: $9.33 billion at removed: June added: September 30, 2026, and net debt was removed: 3.4 added: 3.3 times adjusted EBITDA. Notes of $1.25 billion are due in August 2027 and $2.0 billion in July 2028, and they must be refinanced at current rates. Equipment revenue fell 22% in Q2 2026 added: and 16% in Q3 2026 because of higher memory costs for radio modules. New car sales also affect the number of new trials.
Balance sheet: Cash: removed: $174M added: $210M Debt: removed: $9.4B added: $9.3B Net debt: removed: $9.3B added: $9.1B Net debt / EBITDA: removed: 3.4× added: 3.3× (medium) Interest cover: removed: 4.1× added: 4.2× Undrawn credit line: removed: $1.9B, added: $2.0B, to August 2030 Debt due within 12 months: removed: $2.0M added: $1.3B Last debt due: 2032 Sirius XM funds itself with senior notes and a revolving credit facility. At removed: June added: September 30, 2026, debt principal was removed: $9.43 added: $9.33 billion: $8.75 billion of senior notes due from August 2027 to April removed: 2032, added: 2032 and $575 million of 3.75% convertible notes due March removed: 2028, and $100 million added: 2028. Nothing was drawn on the $2.0 billion credit facility, which runs to August 2030. added: The $1.25 billion of 5.00% notes due August 1, 2027 are now current maturities. In 2026, the company issued $1.25 billion of 5.875% notes due 2032 and used the money and cash to repay its 2026 notes, its term loan and $250 million of its 2027 notes. Cash was removed: $174 added: $210 million. Net debt was removed: 3.4 added: 3.3 times adjusted EBITDA, as the company reports it, removed: which is within added: and the company says that it reached its removed: target range. added: long-term leverage target. Interest cover is income from operations added: of $1.41 billion divided by interest expense added: of $333 million for the first removed: half added: nine months of 2026. The company paid $91 million of dividends and bought back removed: $6 added: $33 million of shares in removed: Q2 added: Q3 2026. As of removed: Jun added: Sep 30, 2026.
Checkpoints: Oct 29, 2026: Q3 2026 results: self-pay subscribers. removed: Pending. added: Passed. Watch: Stable or growing self-pay subscribers, churn near 1.5% a month and the raised 2026 guidance kept pass; a loss of more than 100,000 self-pay subscribers or a cut to guidance fails. removed: Feb added: Outcome: Self-pay subscribers grew by about 5,000, churn was about 1.5% a month, and the company raised its 2026 guidance again. Jan 29, 2027 (estimate): Full-year 2026 results and 2027 guidance. Pending. Watch: Free cash flow near removed: $1.375 added: $1.40 billion for 2026 and 2027 guidance for stable revenue and adjusted EBITDA pass; guidance for a fall in revenue or EBITDA fails.
Recent events: Oct added: 29, 2026: Sirius XM reported Q3 2026 results. Revenue fell slightly to $2.15 billion, net income rose 7% to $317 million, and diluted EPS fell to $0.78 from $0.84 because of the accounting for the convertible notes. Adjusted EBITDA rose 3% to $694 million, and free cash flow rose 14% to $293 million. Self-pay net additions were about 5,000, 45,000 better than a year earlier, and self-pay churn was about 1.5%. The company raised its 2026 guidance by $25 million each for the second quarter in a row, to revenue of about $8.55 billion, adjusted EBITDA of about $2.65 billion and free cash flow of about $1.40 billion. It said that it plans to increase share repurchases a lot in 2027. Oct 5, 2026: Sirius XM said it will report Q3 2026 results on October 29, 2026. Jul 30, 2026: Sirius XM reported Q2 2026 results. Revenue rose 1% to $2.16 billion, net income rose 17% to $239 million, or $0.70 per diluted share, and adjusted EBITDA rose 3% to $691 million. Free cash flow rose 48% to $593 million. Self-pay net additions were about 22,000 and self-pay churn was a record low of about 1.4%. The company raised its 2026 guidance by $25 million each, to revenue of about $8.525 billion, adjusted EBITDA of about $2.625 billion and free cash flow of about $1.375 billion. On the same day, it said that COO Wayne Thorsen would leave on July 31, 2026, and that it does not plan to name a successor. Mar 29, 2026: Sirius XM redeemed $250 million of its 5.00% senior notes due 2027. Mar 4, 2026: Sirius XM issued $1.25 billion of 5.875% senior notes due 2032. It used part of the money to buy back about $499 million of its 3.125% senior notes due 2026 in a tender offer.