Sirius XM Holdings Inc. (SIRI) stock analysis

P/E below its 5-year median

Sirius XM's P/E of 13.1 is below its own 5-year median of 14.1.

P/E below the industry

Sirius XM's P/E of 13.1 is below the Communications median of 15.2.

EV/EBITDA below its 5-year median

Sirius XM's EV/EBITDA of 9.3 is below its 5-year median of 10.4.

P/B below the industry

Sirius XM's price-to-book of 0.88 is below the Communications median of 2.30.

Trading below fair value

The share price of $31.85 is below our fair value estimate of $38.33.

Margin of safety under 20%

The price is 16.9% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -1.7% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -9.0% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -9.4% over the last twelve months, against a 5-year average of 43.8% a year.

Growing slower than the industry

Revenue grew 0.5% over the last twelve months; the Communications median is 1.2%.

Guidance raised

Sirius XM raised its full-year 2026 Total revenue outlook on Jul 30, 2026.

Gross margin improving

Gross margin was 52.9% over the last twelve months, against 52.4% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital under 10%

Return on invested capital was 5.8%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Sirius XM's return on equity of 7.6% is below the Communications median of 7.6%.

Earnings grew over 5 years

Net income grew 43.8% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 10.5% over the last twelve months, against a 5-year average of 4.8%.

Net margin above the industry

Sirius XM's net margin of 10.5% is above the Communications median of -1.9%.

High debt

Debt is 76.7% of shareholders' equity, above the 40% we consider low.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 22.9% of total debt.

Interest not well covered

Operating income covers interest expense 3.7 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.32 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.46; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Sirius XM paid dividends worth 3.4% of the share price over the last twelve months.

Yield below Treasuries

The 3.4% yield is below the 4.7% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Sirius XM yields 3.4%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 8 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.