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Sirius XM Up on Robust 2017 Self-Pay Subscriber Additions

Zacks

Shares of Sirius XM Holdings SIRI gained 4.6% on Jan 10 to close the trading session at $5.55 per share, following its better-than-expected performance in 2017 with respect to self-pay subscriber additions.

The company said that it added approximately 1.56 million self-pay subscribers in 2017, higher than its guidance of approximately 1.4 million additions. The better-than-expected performance resulted in this New York-based company ending 2017 with 27.5 million self-pay subscribers. The comparable 2016 figure was approximately 26 million.

Moreover, Sirius XM revealed that it added approximately 1.39 million subscribers (net) in 2017, thereby ending the year with a total subscriber base of 32.7 million. The figure was higher than 31.3 million subscribers a year ago.

In October, this satellite radio company had said that it expects to end 2017 with revenues of approximately $5.4 billion, adjusted EBITDA of around $2.1 billion and free cash flow of approximately $1.54 billion. Yesterday, Sirius XM stated that it expects to meet or exceed the projections.


Apart from its commentary on 2017, this Zacks Rank #3 (Hold) company declared that the new tax law is likely to boost its cash generation to the tune of approximately $900 million over the next four years. Also, the new law is expected to result in annual tax savings of $200 million after the four-year period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Furthermore, Sirius XM anticipates adding approximately 1 million (net) self-pay net subscribers in 2018. The company expects to end the current year with revenues of approximately $5.7 billion. Adjusted EBITDA and free cash flow are projected to be approximately $2.15 billion and $1.5 billion, respectively.

Additionally, at Citi's 2018 Global TMT West Conference, the company’s chief financial officer (CFO) David Frear reportedly said that Sirius XM was not looking to make any major acquisition. It, instead, intends to create value from within its operations. We remind investors that Sirius XM had invested $480 million in Pandora Media P last year.

Other Stocks to Consider

Investors interested in the broader Consumer Discretionary sector may consider stocks like Roku ROKU and Michael Kors Holdings Limited KORS carrying a Zacks Rank #2 (Buy).

Shares of Roku and Michael Kors have surged more than 89% and 34%, respectively, in the last three months.

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