Sirius XM Earnings: Signs of Subscriber Stabilization, but Revenue Weakness Persists

Sirius XM is undertaking several initiatives to drive subscribers back to its SiriusXM service, and it saw encouraging results on that front in the third quarter. Monetization is a different story, with the firm’s revenue decline accelerating and management reducing its full-year outlook. We believe the balance between growing subscribers and offering attractive prices will remain Sirius XM’s primary challenge. It faces competition from streaming music providers while having no discernible moat, in our view, to give it an edge without competing on price and paying up for content rights. We maintain our $30 fair value estimate.