(Sirius XM self-pay monthly churn figure corrected; figure was taken from S&P report, which had a typing error.)
NEW YORK (TheStreet) -- Analysts remain mixed on their recommendations for Sirius XM (SIRI) - Get Report after the company reported net income per share that topped the consensus estimate, while veering on the cautious side with its full-year guidance.
For the first quarter, Sirius XM reported net income per common share of 1 cent versus a loss of 7 cents a share in the year-ago period, beating the break-even consensus estimate. Sirius XM added that it has "nothing new to report," regarding its contractual negotiations with Howard Stern.
While a big question mark about Stern remains, the company has begun signing new contracts. For example, Sirius XM recently announced that conservative talk show host Glenn Beck will be joining its Patriot channel, and will become available to all Sirius XM subscribers starting May 17. "The Glenn Beck Program" will air live daily.
More on Sirius XM
Sirius Standoff with Stern
BGB Securities analyst Murray Arenson, for one, left Sirius XM's earning calls with a sense of confidence, and raised his price target for the stock to $1.35 from $1.15, previously. Arenson has a buy opinion for the stock.
"Sirius is executing well, in our opinion. As auto sales have improved in recent months, Sirius has enhanced operational efficiencies, and has taken steps to improve its balance sheet," Arenson said in an investor note. "While the company is cautiously maintaining its guidance, we have raised our forecast marginally."
Arenson added that he will continue to focus on car sales numbers and their related, upfront subscriber costs, given that it's a crucial cash flow driver for Sirius XM.
Two other analysts who cover Sirius XM stock, meanwhile, held hold opinions on the stock after Sirius XM issued its first-quarter report.
Looking forward, S&P's Tuna Amobi sees some good and some not-so-good scenarios for Sirius XM. Among the good: "We see the auto OEM (original equipment manufacturer) channel benefiting from a rebound in U.S. light vehicle sales, and improved conversion rates of promotional and unpaid trials to self-pay subscribers," he noted. Amobi has a 12-month price target of $1.50 for Sirius XM. "In contrast, we expect further subscriber losses in the after-market retail channel."
Amobi projects that Sirius XM will add a bit less than 600,000 and 800,000 customers in 2010 and 2011, respectively, reaching almost 20 million customers by the conclusion of next year, with roughly 2% self-pay monthly churn. Sirius XM ended 2009 with about 18.8 million subscribers.
Matt Harrigan of Wunderlich Securities, who is also brandishing a hold opinion on Sirius XM stock, described its first quarter report for both top line and expense control as "excellent." Still, Harrigan notes that his $1.25 target shows "caution on the economy despite the current burst of latent vehicle demand."
One of the more bearish of Sirius XM analysts is Marek Fuchs, a former stockbroker for Shearson Lehman Brothers, and a writer for
. In his May 10th
Against the Grain
Fuchs urged investors to sell Sirius stock. "When it comes to Sirius, Stern is all that matters -- seriously. Here's why: his contract comes due. They need to resign him to maintain their momentum and their pull and their hold on the public, but if they do resign him, it's probably going to be for enough money to step on any earnings progress they've made, thanks to the slight recovery, at least in the short-run, in auto sales.
"All in all, they're in a nasty knot. And until they untie themselves when it comes to Howard, not Europe, you can't be chasing this thing up, it's just going to come down."
But don't take their opinion on it -- we want to know yours. And so we ask: Users of
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-- Reported by Andrea Tse in New York
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