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Sirius posts a sizable gross profit margin.

Its subscriber base will continue to increase.

The net profit margin will increase over the next few years.

Sirius XM Holdings Inc (NASDAQ:SIRI), the result of a merger in 2008 between XM Satellite Radio and Sirius Satellite Radio, is a fairly young company, though its parental roots stretch long back into the 1990s. In spite of predictions that it would die a natural death alongside radio, both radio and Sirius are still around. With Sirius, though, the company has managed to not only provide new and innovative ways to add favorite music to the rosters of their subscribers, they have actually been able to increase their subscriber base along the way.

Sirius has embraced the new technology that was ushered in by mobile devices. Instead of offering a parallel system for people to have access to music, the companies Apple (NASDAQ:AAPL), BlackBerry (NASDAQ:BBRY) and Android (GOOG, GOOGL) offered apps that allow subscribers to utilize their favorite devices to access the radio stations that are personally customized by them. Since 2009, Sirius increased its subscriber base by seven million in just five years. In 2009, the company boasted 18.8 million subscribers. Today, it has 25.8 million subscribers and that number will continue to rise.

First, the Negative

There are plenty of naysayers who think that Sirius is not a strong buy. They might cite the company's history of underperformance when compared to other stocks. For example, while the industry average is 14.8%, Sirius' stock grew only 11.2%. This seems at odds to its gross profit margin of 60.86%, making it seem like the company should be turning a high profit for its investors.

Unfortunately, at this writing, this higher gross is not felt by investors. In fact, the net profit margin Sirius returned was 9.42%, falling far below the average in the industry. In addition, even its gross profit margin today is less than it was just last year. These figures do not tell the whole story, though. They hide the fact that Sirius is a Buy, even when its earnings are flat.

Overlook the Negative

It is impossible to overlook the fact that Sirius has agreements with nearly every automaker that places their subscription service in a wide range of vehicles. This puts their exclusive content at the fingertips of those people who are making the financial decisions for their households. Because the automakers typically include a subscription to Sirius services with each car that they sell or lease, the company has a steady stream of revenue paid for by the automakers that is already built in.

Long-Term Projects

By thinking in the long term, the picture for making Sirius a Buy becomes clearer. As a leader in the next generation of connected vehicles, Sirius stands poised to double the $100 million in yearly revenue it already sees in 2014. This is due to the fact that more than 120 million new vehicles will be on the streets and already equipped with Sirius.

Tapping Into the Aftermarket

Sirius offers a great deal of exclusive content, increasing its appeal to the next generation who wants to be the first to know. In addition, subscribers to Sirius are able to access an entire roster of non music selections. These include news, talk shows, sports and more. Heavy hitters in the entertainment industry, as well as those in the sports industry have teamed up with Sirius to deliver content that is exclusive to the network.

Stand Out Things to Know About Sirius

Besides its exclusive content, Sirius does have advantages over other music delivery options that are available. While Sirius does play ads on many of its non-music channels, it does so less frequently on its music channels. In contrast, the business models of Apple and Pandora, Sirius' two largest competitors, play ads along with their music.

Another advantage is that Sirius offers its subscribers the ability to customize their channels to meet their unique needs. This component is likely to draw subscribers away from the services offered by Pandora, Apple and other companies. This is particularly true when the flexibility of the Sirius apps for mobile devices allows subscribers to listen to channels full of their favorite music, sports and news even while they are not in their vehicles. Giving their subscribers this versatility is sure to make them loyal customers long after their initial trial subscriptions run out.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.