BofA warns Fed risks policy mistake with early rate cuts
On Tuesday, Guggenheim reiterated its Buy rating on Sirius XM Radio (NASDAQ: SIRI), maintaining the $30.00 price target for the company's shares. According to InvestingPro data, analyst targets for SIRI range from $21 to $40, with the stock currently appearing undervalued based on Fair Value analysis.
The firm updated its model for Sirius XM to align with the new guidance provided by the company's management earlier in the day, which included a strategic update and financial projections for 2025.
The updated financial outlook for 2025 presented by Sirius XM's management indicated revenues of $8.5 billion and adjusted EBITDA of $2.6 billion, figures that were slightly lower than Guggenheim's previous estimates of $8.7 billion and $2.7 billion, respectively.
For context, current trailing twelve-month revenue stands at $8.8 billion with EBITDA at $2.56 billion, as reported by InvestingPro. The forecast also showed an expected free cash flow (FCF) of $1.15 billion, compared to the $1.25 billion anticipated by Guggenheim.
Despite the revised near-term projections for 2025, Sirius XM is targeting a free cash flow of $1.5 billion by 2027, which aligns with Guggenheim's existing and current outlook. The company's strategic priorities remain consistent, with a strong emphasis on reinforcing its core automotive subscriber base.
Additionally, Sirius XM plans to focus on deleveraging, with an aim to reduce debt by approximately $700 million by the year 2025. This is significant given the company's current total debt of $10.7 billion, though InvestingPro notes that SIRI has maintained dividend payments for 9 consecutive years, demonstrating financial stability despite its debt load.
The company also plans to implement cost-saving measures, aiming for an incremental $200 million in annualized savings by the end of 2025. Guggenheim's updated model reflects the conservative estimates provided by Sirius XM, which account for factors such as continued advertising pressure, a flat to declining subscriber outlook, and stable to decreasing average revenue per user (ARPU).
InvestingPro analysis reveals several additional insights about SIRI's financial outlook, with multiple analysts revising earnings downward for the upcoming period. Subscribers can access the comprehensive Pro Research Report for deeper analysis of SIRI's financial health and future prospects.
In other recent news, Sirius XM Holdings (NASDAQ:SIRI) Inc. has projected its 2025 revenue to be $8.5 billion, falling short of the market expectation of $8.7 billion. Despite this, the company remains confident in its strategy to focus on its core subscription business and advertising, as well as improving operational efficiency and prioritizing shareholder returns. Sirius XM plans to continue investing in streaming services, including integration into Tesla (NASDAQ:TSLA)'s operating system, and intends to enhance the advertising aspect of its business.
The company has also outlined efficiency improvements, targeting an additional $200 million in annualized savings by 2025. Sirius XM's financial strategy includes reducing its debt by $700 million in 2025 and maintaining its current quarterly dividend of $0.27 per share. Additionally, the company anticipates an adjusted EBITDA of $2.6 billion and free cash flow of $1.15 billion for 2025, with a target of $1.5 billion in free cash flow by 2027.
In line with these developments, Wayne D. Thorsen has been appointed as the new Executive Vice President and Chief Operating Officer. These are the recent developments within Sirius XM Holdings Inc.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.