Sirius XM Holdings Faces Structural Declines Amidst Transitional Strategy and Competitive Pressures

Wells Fargo analyst Steven Cahall maintained a Sell rating on Sirius XM Holdings (SIRI – Research Report) yesterday and set a price target of $16.00.

Steven Cahall has given his Sell rating due to a combination of factors impacting Sirius XM Holdings. The company is attempting to manage costs and packages to return to growth, but projections for 2025 show declines in subscribers, revenue, and EBITDA. Cahall expresses concern that these declines are structural, leading to an Underweight rating similar to that of cable companies.
Despite outperforming in Q1 self-pay net adds, Sirius XM faces challenges from click-to-cancel options, streaming competition, and shortened promotional periods. While there is some optimism for stronger auto sales in the first half of the year, the second half may see pressures. The company’s evolving strategy, moving away from streaming-only models and adjusting pricing tiers, indicates a transitional period. Cahall’s estimates for 2025 and 2026 remain largely unchanged, reflecting the ongoing challenges and uncertainties facing Sirius XM.

In another report released on April 25, Morgan Stanley also maintained a Sell rating on the stock with a $21.00 price target.

SIRI’s price has also changed moderately for the past six months – from $27.650 to $19.500, which is a -29.48% drop .