NEW YORK (TheStreet) -- SiriusXM (SIRI) - Get Report stock is down 0.25% to $3.93 in midday trading Thursday after Deutsche Bank initiated coverage with a "hold" rating and a price target of $4.  

"We like SiriusXM's business model, growth outlook, and capital allocation strategy.  However, we find the valuation fair at these levels," Deutsche Bank said. 

The core business revenue is growing, driven by growth in the installed base of vehicles and modest average revenue per unit (ARPU) growth, partially offset by a continued gradual decline in OEM (major automotive manufacturers) subscriber penetration of the installed base, the firm noted about the radio broadcaster, adding that they expect these trends to continue. 

SiriusXm can compound equity returns of 7.1% per year over our six year forecast period based on our estimates and the current stock price, according to the firm.

Key areas of potential upside include price increases that yield ARPU growth greater than 0.7%, higher-than-expected revenue and profit growth from connected car, lower-than-expected churn, and auto sales in excess of 17 million in 2015 or beyond, Deutsche Bank analysts said. 

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

"We rate SIRIUS XM HOLDINGS INC (SIRI) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

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

• SIRI's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 9.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• SIRIUS XM HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, SIRIUS XM HOLDINGS INC increased its bottom line by earning $0.09 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($0.12 versus $0.09).
• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 119.5% when compared to the same quarter one year prior, rising from $65.20 million to $143.12 million.
• The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Media industry and the overall market, SIRIUS XM HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
• The gross profit margin for SIRIUS XM HOLDINGS INC is rather high; currently it is at 61.40%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.11% trails the industry average.
• You can view the full analysis from the report here: SIRI Ratings Report