Posts Tagged ‘EBITDA’

Sirius XM (NASDAQ:SIRI): RBC Capital Markets Analyst David Bank Maintains $2.00 Price Target

Posted 04 Nov 2011 — by Demian Russian
Category Analyst Coverage, Media, Sirius XM (SIRI) News

By Demian Russian

RBC Capital Markets on Sirius XM Radio (NASDAQ:SIRI)RBC Capital Markets Global Media Analyst David Bank issues a new research report weighing in on Sirius XM Radio’s (NASDAQ:SIRI) third quarter earnings results, maintaining his previous $2.00 price target and Sector Perform/Speculative Risk rating on the equity. While Bank describes Sirius XM’s third quarter results as being less than perfect, it’s the stock valuation as opposed to any operational issues which he says “keeps us on the sidelines.”

Sirius XM’s reported Q3 net subscriber additions of 334k came in below Bank’s estimate for 385k. According to Bank, the weakness in net sub adds lead to the company reporting higher EBITDA, as a result of the associated SAC (Subscriber Acquisition Costs) being lower. While net subscriber additions came in lower as a result of lower net promotional subs, Bank says, “Quite frankly, we aren’t sure why net promotional sub additions came in ~65k below our expectations.” He says that part of it may have been the result of a weaker U.S. auto sales SAAR during the summer months and a slowdown in the OEM production cycle in Asia, due to residual impact from the earthquake in Japan. While Bank reduced some of his full-year 2011 estimates slightly, he expects a bounce in the fourth quarter due to “solid OEM trends in 3Q11 sales and production.” Read More

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Sirius XM Radio (NASDAQ:SIRI): BGB Securities Analyst Murray Arenson Maintains BUY Rating, $2.40 Price Target

Posted 03 Nov 2011 — by Demian Russian
Category Analyst Coverage, Media, Sirius XM (SIRI) News

By Demian Russian

Sirius XM Radio (NASDAQ:SIRI) - BGB Securities - Murray Arenson With a newly issued research report following Sirius XM Radio’s third quarter earnings results, BGB Securities Media Analyst Murray Arenson reiterates his previous BUY rating and $2.40 price target on the equity.

Our belief in Sirius is predicated on the strength of the company’s model and the attractiveness of its offering, validated by the subscriber metrics.

– Murray Arenson, BGB Securities Media Analyst

Arenson characterizes Sirius XM’s Q3 results as being mixed, with subscriber growth coming in below his estimate and reported adjusted EBITDA exceeding his expectation. While he has a strong belief in Sirius XM’s business model and its “high degree of predictability,” Arenson notes, “We do see some relatively new factors that complicate visibility and forecasting, which we believe have pressured the stock.” Read More

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Sirius XM Radio (NASDAQ:SIRI): Morgan Stanley Reiterates Overweight Rating

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Posted 01 Nov 2011 — by Demian Russian
Category Analyst Coverage, Media, Sirius XM (SIRI) News

Morgan Stanley - Sirius XM Radio (NASDAQ:SIRI) analyst coverage

By Demian Russian

Following Sirius XM Radio’s (NASDAQ:SIRI) third quarter earnings release and conference call this morning, Morgan Stanley analyst Benjamin Swinburne issued a new research report reiterating an OVERWEIGHT rating and a $2.00 price target on the equity. Swinburne had previously reduced his price target from $2.60 to $2.00 on October 10th, while also maintaining his OVERWEIGHT rating.

We are encouraged by the strong incremental margins and continue to expect rapid FCF/share growth, driven by strong EBITDA growth, leverage, and potential for equity shrink.

– Benjamin Swinburne, CFA, Morgan Stanley 

While Swinburne viewed Sirius XM’s Q3 results as being “relatively in-line” characterized by “lighter than expected” subscriber additions, he noted Sirius XM’s top line and EBITDA beat as a result of better than expected revenue per subscriber and higher than expected adjusted EBITDA margins, which Swinburne notes was a result of  lower than expected revenue share combined with lower than expected  royalty and programming costs. Swinburne noted that “high incremental margins combined with strong cost controls” was the key to his margin expansion thesis. Read More

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Standard & Poor’s Upgrades Sirius XM Radio’s (NASDAQ:SIRI) Corporate Credit Rating on Improved EBITDA and Debt Leverage

Posted 26 Oct 2011 — by Demian Russian
Category Analyst Coverage, Media, Sirius XM (SIRI) News

By Demian Russian
Standard & Poor's - Sirius XM Radio (NASDAQ:SIRI)
Standard & Poor’s upgraded Sirius XM Radio’s (NASDAQ:SIRI) corporate credit rating today from ‘BB-’ to ‘BB’ with a stable outlook. Standard & Poor’s Director of Corporate Ratings Hal Diamond cited Sirius XM’s improved EBITDA generation and debt leverage as driving the upgrade. In addition, Diamond noted that he believes Sirius XM’s “progress in credit quality is sustainable.”

The stable rating outlook reflects our view that a continued recovery in auto sales will support revenue growth and maintain credit measures appropriate for the ‘BB’ rating over the intermediate term.

– Hal Diamond, Standard & Poor’s Director of Corporate Ratings

Diamond said the credit upgrade reflects Sirius XM’s “declining debt leverage, improving discretionary cash flow, and the prospects for continued improvement in credit measures through the remainder of 2011 and 2012.” While Diamond expects Sirius XM’s debt levels will “remain relatively stable,” he believes that through its continuing EBITDA growth the company will continue to reduce its gross adjusted debt leverage ratio to the mid-3x area by the end of 2012. Read More

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Sirius XM Radio (NASDAQ:SIRI): Morgan Stanley Lowers Price Target from $2.60 to $2.00, Reiterates OVERWEIGHT Rating

Posted 10 Oct 2011 — by Demian Russian
Category Analyst Coverage, Media, Sirius XM (SIRI) News

Morgan Stanley - Sirius XM Radio (NASDAQ:SIRI) analyst coverage

By Demian Russian

Morgan Stanley issues a new research report on Sirius XM Radio (NASDAQ:SIRI) today reiterating their previous OVERWEIGHT rating, but lowering their base price target on the equity from $2.60 to $2.00 on their reduced longer-term FCF and U.S auto sales SAAR estimates following what they described as a “broader market and sector selloff.”

Even with a reduced US auto sales forecast, we continue to believe SIRI can produce ~25% annual EBITDA growth in ‘12E-‘14E. However, we are lowering our price target on lower estimates as we incorporate a lower yield from the company’s announced ’12 price increase, lower SAAR and broader market and peer group multiple compression.

– Benjamin Swinburne, CFA, Morgan Stanley

Morgan Stanley analyst Benjamin Swinburne said that their reiteration of an OVERWEIGHT rating on SIRI was driven by the company’s accelerating top line growth, fueled by the recovery in U.S auto sales and the coming price increases in 2012, attractive marginal economics combined with continuing merger related synergies, which will drive margin expansion and rapid EBITDA growth, and the potential for the company to institute a share buyback program in 2012. Read More

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Wunderlich Securities Analyst Matthew Harrigan on the Dueling OEM/Dealer Announcements from Sirius XM (NASDAQ:SIRI) and Pandora (NYSE:P)

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Posted 07 Oct 2011 — by Demian Russian
Category Analyst Coverage, Internet Radio, Media, Sirius XM (SIRI) News

By Demian Russian

Wunderlich Securities - Sirius XM (NASDAQ:SIRI) - Matthew Harrigan - analyst coverageWunderlich Securities Media Analyst Matthew Harrigan issues a new research report weighing in on the recent “dueling Japanese OEM/Dealer announcements” from Sirius XM Radio (NASDAQ:SIRI) and Pandora (NYSE:P). While Harrigan views Sirius XM’s valuation as becoming more attractive at current trading levels, he maintains a HOLD rating and $2.00 price target on the equity.

The stock is manifestly becoming more attractive at current levels, but we are still concerned about relative valuation within the media sector and hardening out SatRad 2.0 capabilities within Sirius XM’s overall mobile and online strategy.

– Matthew Harrigan, Wunderlich Securities

Harrigan believes that Sirius XM’s newly announced deal with Nissan and Infinity dealers to offer free Sirius XM trial subscriptions on Satellite Radio equipped pre-owned vehicles compliments a similar program with General Motors (NYSE:GM) announced in June, along with trial subscriptions offered by the German automakers BMW, Mercedes, and Volkswagen. On yesterday’s announcement from Pandora that an embedded version of its service would be available on 2012 Toyota (NYSE:TM) Camrys and Tacomas, he said, “This is the realization of the January 2011 CES announcement that Pandora would be endemic on Toyota’s “Entune” infotainment system.” While noting that iPhone, Blackberry, and Android smartphone data plans can all be utilized to stream Pandora in Toyota vehicles, Harrigan believes that Sirius XM’s wide array of content and continued listener interest in terrestrial radio create more important challenges than the cost of streaming. Read More

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Wedge Partners Senior Research Analyst Martin Pyykkonen on Sirius XM Radio (NASDAQ:SIRI)

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Posted 20 Sep 2011 — by Demian Russian
Category Analyst Coverage, Media, Sirius XM (SIRI) News

By Demian Russian

Wedge Partners - Sirius XM Radio (NADAQ:SIRI) - Martin PyykkonenFollowing Sirius XM Radio (NASDAQ:SIRI) CEO Mel Karmazin’s announcement at the Bank of America/Merrill Lynch Media Communications and Entertainment Conference last Wednesday, during which he offered 2012 guidance and announced the company’s plans to raise its prices beginning on January 1st, 2012, Wedge Partners Senior Research Analyst Martin Pyykkonen issues a new research report on the Satellite Radio service provider.

While Sirius XM introduced full year 2012 guidance of 10% revenue growth to $3.3B, 20% adjusted EBITDA growth to $860 million and 75% FCF growth to $700 million, and also reiterated full year 2011 guidance of $3 billion in revenue, $715 million in EBITDA and $400 million in FCF, Pyykkonen notes that the company’s new guidance is based on a current OEM-based 2012 SAAR estimate of 12.5-13.0 million new domestic vehicle sales. Pyykkonen is estimating 2012 net new subscriber additions of 2.015 million, bringing Sirius XM’s total year-end subscriber base to 23.84 million and equating to subscriber growth of 9.2% year-over-year.

While Sirius XM’s new guidance indicates a 26% EBITDA margin for full-year 2012, Pyykkonen believes that the company can achieve a >40% EBITDA margin in the 2014-2015 timeframe and based on his current subscriber growth rate and operating expense estimates he is still forecasting a 40% adjusted EBITDA range along with EBITDA-to-FCF conversion increasing to > 90% by the 2014-2015 timeframe. Pyykkonen notes that through 2017 (or even longer) the company’s capex spending should remain limited, with maintenance costs of only ~$50 million a year. Pyykkonen also notes the company’s improved debt picture, which he says “should be serviceable under the current levered FCF outlook.” Read More

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Wunderlich Securities Analyst Matthew Harrigan On Sirius XM’s (NASDAQ:SIRI) 2012 Guidance

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Posted 16 Sep 2011 — by Demian Russian
Category Analyst Coverage, Media, Sirius XM (SIRI) News

By Demian Russian

Wunderlich Securities - Sirius XM (NASDAQ:SIRI) - Matthew Harrigan - analyst coverageOn the heels of Sirius XM Radio (NASDAQ:SIRI) CEO Mel Karmazin’s presentation at the Bank of America/Merrill Lynch Media Communications and Entertainment Conference on Wednesday, during which he offered 2012 guidance and announced the company’s plans to raise its prices beginning January 1st, 2012, Wunderlich Securities Media Analyst Matthew Harrigan issues a new research report weighing in on the company’s new 2012 guidance and reiterating his previous HOLD rating and $2.00 price target.

Harrigan viewed Sirius XM’s release of 2012 guidance on Wednesday, ahead of management’s previously expected release date of the Q3 conference call, as “encouragingly a little early.” While he viewed this move by the company as surprising and displaying “confidence in its business model,” he notes that “the $3.3 billion 2012 revenue guidance was shy of $3.38 billion consensus, and the $860mm EBITDA bogey actually imbedded ‘only’ 48% marginal sales contribution to EBITDA — with the latter albeit affected by SAC outlays.” While modeling his 2012 numbers to management’s new 2012 guidance, including $700 million in FCF (Free Cash Flow), Harrigan sees “upside possible” due to his having to crimp the conversion rate to 42.8% and increase churn to 2.3% as a result of the announced price hike.

Sirius XM is increasingly the main conduit for branded audio content and content costs as a percentage of sales are actually contracting with certain expensive five-year deals rolling over. The highly desirable NASCAR deal expires at year-end and the expensive MLB (Major League Baseball) deal is another mid term prospect for cost savings. This branded content along with SatRad 2.0 are pivotal in fending off competition from streamed music services such as Pandora (NYSE:P) and Spotify. 

Matthew Harrigan, Wunderlich Securities

While Harrigan notes that Sirius XM management did not offer “explicit sub and ARPU growth guidance,” he says that ”realized 2012 ARPU (estimated at +4.2%) is affected by contract roll-off timing, the lower ARPU on paid promo subs relative to self-pay, and the compelling aspect of more extended OEM promo periods – even if at lower price points.” Harrigan is modeling a 2012 auto sales SAAR assumption of 12.3 million, below the 12.5-13.0 million SAAR estimates suggested by Sirius XM’s OEM partners, and notes that guidance could prove to be conservative if the economy can avoid a double dip. Read More

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Sirius XM (NASDAQ:SIRI): RBC Capital Markets Analyst David Bank Raises Price Target

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Posted 05 Aug 2011 — by Demian Russian
Category Analyst Coverage, Media, Sirius XM (SIRI) News

By Demian Russian

RBC Capital Markets - Sirius XM - SIRIOn the heels of Sirius XM Radio’s (NASDAQ:SIRI) Q2 results and conference call, RBC Capital Markets Global Media Analyst David Bank issues a new research report and raises his price target from $1.50 to $2.00, but maintains his Sector Perform/Speculative Risk rating on the equity.

Going forward, we believe the value of SIRI could be impacted by two long-term dynamics that are in flux: rate hikes and used car penetration. There remains limited visibility around these dynamics, and we think details from management around specifics for both could act as a catalyst for stock movement.

– David Bank, RBC Capital Markets

While Bank feels that not much has changed, he is waiting to see more visibility from management regarding price increases and penetration in the used vehicle segment. In spite of the limited specifics, but in light of management’s “general comments” regarding a price increase, Bank has raised his ARPU estimates, although he notes that it will take awhile for any prices increases to penetrate the subscriber base due to long-term subscriber contracts and promotions. He believes more detail regarding price increases will be offered during the Q3 conference call, at which management has indicated 2012 guidance will be given. Bank also awaits more specific guidance from management on used vehicle subscriber distribution and economics, such as promotions and used car conversion (particularly not certified), which Bank notes “are subject to a high degree of variability.” Read More

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Maxim Group Analyst John Tinker Weighs In On Sirius XM (NASDAQ:SIRI) Ahead Of Q2 Earnings

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Posted 27 Jul 2011 — by Demian Russian
Category Analyst Coverage, Media, Sirius XM (SIRI) News

Maxim Group - John Tinker - Sirius XM (NASDAQ:SIRI)By Demian Russian

Maxim Group Senior Media Analyst John Tinker issued a new research report today weighing in on Sirius XM Radio (NASDAQ:SIRI) ahead of the company’s Q2 earnings results and conference call, scheduled for 8:00 am on Tuesday, August 2nd. Tinker maintains a BUY rating and $2.50 price target on the equity, based on a 16.5x 2012 EV/EBITDA multiple. Tinker had last reiterated his BUY rating, and raised his price target from $2.20 to $2.50, following Sirius XM’s Q1 results.

Tinker estimates that Sirius XM will add 391k net new subscribers in Q2, which would bring the company’s total subscriber count to 20.96 million, a 7.3% year-over-year increase from 19.53 million net subscribers in Q2 2010. Tinker assumes that new subscribers are down ~33%, as “the prior year benefitted from high promotions.” Sirius XM reported net subscriber additions of 1.42 million for full-year 2010 and has provided guidance for 1.4 million sub adds for full-year 2011. Tinker believes the company’s subscriber guidance to be conservative and is hopeful that the company will raise its year-end guidance to reflect the pick-up in auto sales. He notes that Sirius XM reported 373,064 net new subscribers in Q1 2011, a 118% year-over-year increase from 171,441, which Tinker explains implies “a negative net subscriber growth of 200,000 over the remaining three quarters in FY11.” Read More

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