During the Great Recession, Sirius was losing subscribers, but the company has seen positive trends as the car market bounced back. Sirius added 1.7 million net new subscribers in 2010. The company has a 2% monthly churn rate, down sharply from just a few years ago.
Barclays Capital analyst James M. Ratcliffe notes that even though satellite radio faces competition from other forms of in-car entertainment, Sirius "has continued to grow its sub base in spite of this, driven in large part by the company's alignment with automaker interests." Ratcliffe rates shares underweight with a $2 price target.
The issue with Sirius has always been its low stock price, as well as the fact that Liberty Media Capital (LMCA) owns 40% of the company. Liberty has historically sold off its investments or spun them out, such as Discovery Communications (DISCA), DirectTV (DTV) and others.
Analysts have also asked why Karmazin and the board do not do a reverse split to garner more institutional investor support. Tinker, however, notes that "the company has a lot of retail investors and they want to help them."Sirius XM reports earnings on February 9. Wall Street analysts polled by Thomson Reuters expect Sirius to report $785.49 million in revenue and 1 cent per share in earnings. Sirius shares are up 1.65% in Wednesday trading at $2.15. Interested in more on Sirius? See TheStreet Ratings' report card for this stock. And check out Roberto Pedone's technical take on the stock in "5 Earnings Stocks Poised to Pop." Check out our new tech blog, Tech Trends. --Written by Chris Ciaccia in New York >To follow the writer on Twitter, go to http://twitter.com/commodity_bull. >To submit a news tip, send an email to: firstname.lastname@example.org
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