Sirius XM Holdings Inc

Sirius XM had a mixed quarterly result. While the company was able to meet the financial guidance set for the year, its revenues in the last quarter were below Wall Street expectations. The company had strong operating performance resulting in an earnings beat along with significant cash generation despite the challenges in the economic environment. During the fourth quarter, the company’s used and new car trial starts were down 3% and 7% consecutively, driven by high vehicle prices and low auto industry sales. This was a challenging environment for the company as the auto sales were the lowest in 11 years in 2022. However, there is an anticipation that new car sales will get up by 6% in the upcoming days, but unfortunately, used car sales are expected to fall slightly again. The advertising market continued to face challenges because of economic and business uncertainties. Sirius XM is trying to attract more consumers to its platform and continues holding the largest share of car music outside combined terrestrial radio. The company also aims to deliver an improved streaming experience with the relaunch of the SXM app. We give the company a ‘Hold’ rating with a revised target price.