The entire basis for this article is new car sales. Nowhere in the article does the analyst mention inflation or the cost of a subscription. It all based on new car sales. The problem with that basis is that Sirius isn't targeting new cars for growth. Several years ago, they released the Sirius app, and they are trying to move users from dashboard radio to a phone based service that can be used in more places, and isn't restricted to the car. In fact, subscribers can receive more channels with the app than through the dashboard. Plus people can get the app without buying a completely new car. So if the financial analyst wanted to properly evaluate the stock based on future growth, he should have at least mentioned the app, and also covered how inflation has affected subscriptions. But he didn't. Which is partly why it's a useless analysis.
The fact is that nearly all Sirius/XM streaming subscriptions are based on vehicle subscriptions and the hook is "you can have it at home and at work as well as in your car". The marketing effort to get new streaming only subscriptions is much less aggressive.
The Wells analysis focused on one factor which has traditionally determined the profitability and growth of the company. In other words, if you read the report (I have a Wells investment account) it focuses on what has the greatest impact on revenue.
And it is not a "he" report but an analysis by the whole investment department as Sirius/XM is one of the stocks that they track and do a full, regular analysis on.
Last week, Sirius announced a cash dividend, and they also hired a new Chief Growth Officer. None of that was mentioned.
As that is not considered significant for future stock price, which is the objective of such a report... they reduce them to strong buy, buy, hold, sell, strong sell at the end of the report.
Once again there's no reason to believe that a decline in Sirius growth will lead to people rushing out and buying transistor radios or spending more time listening to 15 minute commercial breaks on OTA radio.
I did not say that, but my analysis is that a slowing of satellite radio growth is of benefit to listening time by actual users, just as the shedding of paid video streaming accounts due to cost benefits cable and OTA television in various proportions.
The analyst avoided making such a fake prediction, which was smart.
That is because he was not evaluating another industry where Wells does not do a full analysis on any specific issues. I made the conclusion that any reduction in Sirius/XM usage certainly does not harm terrestrial radio and could, slightly for sure, benefit it. And that is because the average poster here believes that satellite usage is much higher than the 8% to 10% of in car usage that is the actual reality.
The proper question is do consumers want to pay for radio. That's a completely different question, and one best triggered by a different article. This particular article is restricted to satellite radio.
And Sirius/XM is a direct competitor, whether actual or potential, to terrestrial radio in nearly every car that is sold and now, two decades after launching, in practically every car and truck on the road.
That is why it is material, also, to look at the way paid vs. ad sponsored streaming-only providers market as the cost and the consumer options determine how many people move away from terrestrial radio.
