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Why Sirius XM (SIRI) Stock Is Up Today

NEW YORK (TheStreet) -- Sirius XM  (SIRI) rose Wednesday after Liberty Media (LMCA) CEO Greg Maffei said it "makes sense" to absorb the satellite radio company but added Liberty would not pursue a deal.

Maffei appeared on CNBC and said consolidation in the industry is not finished yet. The company said Monday it plans to purchase 3.7 million shares of Live Nation Entertainment  (LYV). Liberty holds a 53% stake in Sirius XM.

The stock was up 0.63% to $3.19 at 11:46 a.m.

Must Read: Warren Buffett's 25 Favorite Stocks

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Separately, TheStreet Ratings team rates SIRIUS XM HOLDINGS INC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SIRIUS XM HOLDINGS INC (SIRI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, premium valuation and deteriorating net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.9%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has increased to $251.39 million or 48.82% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.70%.
  • The gross profit margin for SIRIUS XM HOLDINGS INC is rather high; currently it is at 60.86%. 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 9.42% trails the industry average.
  • SIRI has underperformed the S&P 500 Index, declining 10.77% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • You can view the full analysis from the report here: SIRI Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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