So yesterday, we heard that Berkshire Hathaway (BRK.B) picked up a big load of satellite and streaming radio giant SiriusXM (SIRI). This move may have prompted some cost-cutting measures at the music giant, and one major cut may be in the making: Howard Stern. The notorious King of All Media’s contract is coming to an end, and he may not be back. Investors proved oddly resistant to this move, and sent Sirius shares down over 3% in Wednesday morning’s trading.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Around five years ago, Stern set up a monster contract valued at $500 million with SiriusXM. Now, that contract is coming due, and there are signs he will not seek another one. One source noted that he might be open to a short-term contract, one to two years, but he is not particularly interested in another five-year run. Reports note that Stern is particularly concerned about his own employees, who would also lose out if his show stopped running.
Stern, 71, is considering retiring outright, and has also been concerned about SiriusXM’s increasing reliance on Andy Cohen, who is another radio personality that is reportedly in competition with Stern. Meanwhile, Stern’s presence on the channel has been somewhat mixed, with him leaning Republican earlier in his career, but now openly identifying as “woke.” And with Stern’s show reportedly suffering in listener numbers—ranges run between 20 million and 125,000—there may be larger problems afoot.
A Disquieting Picture
Meanwhile, outside analysts are taking a look at SiriusXM stock and making some interesting conclusions. In fact, one key point recently made suggests two compelling reasons why Berkshire took a greater stake in the stock.
The bad news for Sirius is that growth has pretty much stalled out. Investors are concerned, and sentiment is on the decline. However—and these are the points that likely got Berkshire’s attention—Sirius’ cash flow has been largely stable over the long run. Between 2022 and 2024, Sirius’ revenue slipped from $9 billion to $8.7 billion. Despite this, Sirius generated around $1 billion in free cash flow. So while growth has stalled, it is still making money. And with cost-cutting measures in play, there might be a greater plan at work here that means value for investors.
Is SiriusXM Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on SIRI stock based on three Buys, three Holds, and five Sells assigned in the past three months, as indicated by the graphic below. After a 30.09% loss in its share price over the past year, the average SIRI price target of $22.80 per share implies 7.3% upside potential.
