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Our article on Tuesday caused quite the stir in our StockSaints chartroom. It seems that our bold prediction that shares of Sirius XM (NASDAQ:SIRI) would reach $4.00 within two weeks following its second-quarter earnings report was met with greater interest than we expected. Two days ago, here on Seeking Alpha, we said:

"And to the extent that Sirius can offer an upside surprise in revenue, say by about 3.5% higher, investors could see $4.00 print within the next couple of weeks. Equally crucial will be what the company says about free-cash-flow growth, which the company has been using to fuel its $2 billion share buyback program."

Our readers and followers are not letting us off the hook. We don't expect them to. And we stand by our prediction of a $4.00 target within two weeks, starting today. Now before we continue, let's dissect the company's results and see how it will get there. This morning, Sirius reported net income of $125.5, which is enough for 2 cents per share on revenue of $940.1 million.

As soon as the numbers came out, I received a few text messages from those that were already prepared to collect on their bet. But not so fast. Some of our Sirius bears - as much as I love them - were quick to point out that profits declined year over year from $3.1 billion or 48 cents per share.

While this may be true, I had to remind our readers that last year Sirius benefited from a $3 billion reversal of deferred income-tax valuation allowances. The Street, however, was unfazed. Consensus estimates of 2 cents per share were met by the company. Now, from a revenue perspective, earlier this week, we mentioned a possible "upside surprise" - to the extent of 3.5%.

I don't believe that Sirius provided that. I'm not suggesting that revenue was a disappointment, though. But there was virtually no growth to speak of. Revenue arrived at $940.1 million. While this was good enough for a beat by half of 1% since the Street was looking for $935 million, it still only represented growth of less than 1% year over year. I will get back to this more in moment.

Net subscribers, however, rose to 715,762 to 25.1 million, which we new already as the company pre-announced these results last week. Even so, the 9% year-over-year increase is the company's best ever performance in six years. I don't believe that investors should ever discount how important of a metric this is, especially in the face of stiff competition from the likes of Pandora (NYSE:P), which has suddenly developed a formidable subscription platform of its own.

As expected, management raised its full-year 2013 EBITDA guidance to $1.14 billion, which we recently discussed and predicted that it would. However, what really caught my attention this quarter was the company's improvement in churn, which improved from 1.9% to 1.7%. It may not seem like a meaningful difference, but churn has been Sirius' main predictor of subscriber value. And the company has been doing everything it can to retain customers.

It seems that Sirius' recent investments in customer satisfaction are beginning to pay off handsomely. Now, with virtually no growth in revenue as I highlighted above, along with an improvement in churn, it would seem that management resorted with aggressive discounting to retain subscribers. But given the fact that ARPU arrived higher-than-expected, aggressive discounting didn't appear to play a major role in disrupting profits.

Ahead of the report, investors were anxious to hear what the company was going to say about ARPU, which stands for average revenue per user/subscriber. Although ARPU was up more than 2% year over year in the first quarter, it fell sequentially from $12.12 to $12.05. It was not a significant drop, but it was enough to elicit questions about the company's business model.

This morning, the company reported a 23-cent sequential increase in ARPU, which arrived at $12.28 compared to $12.05 in the first quarter. What this means is that management did not have to sacrifice margin to grow subscribers. Accordingly, I'm now upgrading the stock by 25 cents and now expect that shares will end the year at $4.50.

This target coincides perfectly with the company's $2 billion share buyback program, of which the company has now completed $650 million. That this means is that the company still has 68% more buying left to do. My bet is that another $500 million will be bought by the third quarter. And with the stock now trading flat this morning at $3.68, I'm betting that shares will reach $3.85 by the middle of next week and then $4.00 by August 9. Who wants some?

Source: Sirius XM: $4 Per Share In 2 Weeks, Who's Taking Bets?