NEW YORK (TheStreet) -- Sirius XM (SIRI) was upgraded to "overweight" from "underweight" by Barclays (BCS), while keeping its price target of $4.00 for the satellite radio company, in a note published Wednesday. The stock is currently up 2.21% to 3.24.
Sirius has endured external adversities in recent months that should not worry investors, according to the report.
"Based on our conversations with investors, this could be driven by: concerns around subscriber growth on the back of trends over the last few quarters and SIRI's guidance and auto sales YTD; concerns on the impact of GM's auto recalls; and news on the competitive impact of Apple launching a streaming music service. In our opinion, apart from the subscriber trends, none of the other reasons should have any material relevance," Barclays said.
Must Read: Warren Buffett's 10 Favorite Stocks
- SIRI's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 12.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $358.58 million or 22.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.84%.
- The gross profit margin for SIRIUS XM HOLDINGS INC is rather high; currently it is at 60.37%. Regardless of SIRI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.51% trails the industry average.
- SIRIUS XM HOLDINGS INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SIRIUS XM HOLDINGS INC reported lower earnings of $0.06 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($0.09 versus $0.06).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: SIRI Ratings Report
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV