- Sirius XM (SIRI +0.7%) is "well positioned" for the continuing growth in in-car entertainment even as dclining auto sales present a growth headwind, Wunderlich argues.
- The firm holds a Buy rating on shares with a price target of $5, implying nearly 20% upside from today's closing price.
- Auto sales have been declining as dealers dial back discounts. “We now conservatively assume that light vehicle sales even in 2020 are only 17.5mm (flat vs. 2015), while continuing to emphasize result and valuation sensitivity to overall sub additions and pricing,” writes analyst Matthew Harrigan, who believes the used market can offset the drop in new-car sales.
- He believes the stock valuation is priced for net annual adds of 1.2M through 2020, with 1.8% annual ARPU growth.
- In its last quarterly report, Sirius XM noted 587,000 net new subs (8% increase) and average revenue per user that grew 3% to $12.78.