The company offers a variety of music, comedy, news, sports, and traffic channels. Its service is streamed through applications. At present, 45% of cars are equipped with a Sirius XM radio. During the past quarter, the company managed to reach 31 million subscribers. The company is expected to hit $1.1 billion in net income in 2020.
While Sirius XM has been profitable, its net income has been declining. However, its net deferred tax asset balance has been reduced and the company has been able to increase its net income through Tax Act savings. Additionally, Sirius XM is likely to continue its dividend. Currently, the company pays a $0.01 per share dividend, which translates to a 0.9% yield.
On Monday, the company announced that it had reached an agreement to acquire Pandora Media. Though the deal was not profitable, it was a wise move on the part of the company. As a result, the stock price has bounced back from a couple of tests of trendline support. If the company can sustain the momentum, the stock price may move towards $5.75, which is a logical protective stop.
Several Wall Street research analysts issued buy and hold ratings for the company in the last 12 months. These ratings indicate that investors should maintain their current positions in the company. A buy rating indicates that the company is undervalued, while a hold rating means that the company is overvalued.
There are several ways to determine Sirius XM"s intrinsic value. Some investors use a mathematical method to multiply the stock price by the outstanding shares. Others look at the company"s history and analyze its price patterns. Other investors use predictive indicators to predict future stock trends. Although most of these are useful for short-term traders, they are not as useful for long-term investors.
Sirius XM has a large market cap, which is calculated by multiplying the current stock price by the number of shares available for sale. The company"s market capitalization has increased from approximately $3.0 billion in February 2016 to over $7.9 billion in February 2020.
Sirius XM has remained profitable, and has grown its subscriber base. But the company is also a make-or-break investment. If the company fails to meet its long-term support, its stocks should be sold. Moreover, it needs to renew its contract with Howard Stern.
Having a strong product line, scalable business model, and an opportunity to expand, Sirius XM is a promising stock. But the company should develop a podcasting platform.
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