Sirius XM Holdings Inc. (SIRI): A Bull Case Theory 

We came across a bullish thesis on Sirius XM Holdings Inc. on Clayton Capital Insights’s Substack. In this article, we will summarize the bulls’ thesis on SIRI. Sirius XM Holdings Inc.’s share was trading at $20.14 as of January 28th. SIRI’s trailing and forward P/E were 4.94 and 6.65 respectively according to Yahoo Finance.

Sirius XM Holdings Inc. operates as an audio entertainment company in North America. SIRI delivered a solid Q3 2025, generating $2.16 billion in revenue, down 1% year-over-year, but reporting a net income of $297 million and EPS of $0.84, a sharp improvement from last year’s loss driven by a $3.36 billion Liberty Media goodwill impairment. Adjusted EBITDA came in at $676 million, with a strong 31% margin supported by disciplined cost management. Subscriber engagement remains healthy, with self-pay monthly churn improving slightly to 1.6%, reflecting the company’s sticky customer base.

CEO Jennifer Witz highlighted better engagement, new content, personalization, and growth in digital advertising and podcasting, while CFO Tom Barry emphasized continued financial strength, including a $120 million debt reduction and $111 million returned to shareholders. SiriusXM upgraded its 2025 guidance, now targeting roughly $8.525 billion in revenue, $2.625 billion in adjusted EBITDA, and $1.225 billion in free cash flow, with projections pointing toward $1.3 billion for the year and potentially $1.5 billion by 2027.

This implies a free cash flow per share of $3.44 in 2025, equating to a 15.8% yield, and nearly $4.32 per share in 2027, approaching a 20% yield. Despite Wall Street labeling SiriusXM a “melting ice cube” amid fears of streaming competition, the data tell a different story: the company’s churn remains consistently below 1.8%, and ARPU is nearly three times that of Spotify.

With roughly 75% of revenue from resilient subscription streams, SiriusXM’s business is far more stable than the market perceives. At current prices, investors gain access to a durable, high-cash-flow business with strong downside protection, ongoing debt reduction, and shareholder returns, creating a compelling opportunity as the market gradually re-rates the stock closer to its intrinsic value.

Previously we covered a bullish thesis on Sirius XM Holdings Inc. (SIRI) by Waterboy Investing in September 2024, which highlighted the company’s strong subscription model, low churn, high-quality content, and expected free cash flow growth. The company’s stock price has depreciated approximately by 21.32% since our coverage. The thesis still stands as SiriusXM remains highly cash-generative. Clayton Capital Insights shares a similar perspective but emphasizes upgraded 2025 guidance and ongoing debt reduction.

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Disclosure: None.