When Do We Start Worrying About Sirius XM?

The early October window is closing on Sirius XM Radio (Nasdaq: SIRI  ) .

This is usually the time -- a few days after the end of a quarter -- that the satellite radio giant showers investors with encouraging news.

 It was on July 9 of this year that Sirius XM raised its revenue and subscriber guidance after tacking on 622,042 net subscribers during the second quarter. It was on Jan. 4 when the media giant revealed that a strong holiday quarter led to 1.7 million net additions for all of 2011.

Silence doesn't equate a lack of good news. There was no pre-announcement after the end of this year's first quarter, and it was still a strong showing. However, silence does open investors up to the possibility of the market darling proving mortal.

At least one analyst doesn't see it that way.

ISI Group's Vijay Jayant issued a bullish note on the company this week. Jayant sees strong subscriber growth during the quarter that just ended, fueled by healthy auto sales earlier this year. He was originally targeting 336,000 net additions, but now he's banking on that figured to clock in closer to 456,000 net subscribers.

He's sticking to his $3 price target on the shares, though, cautious ahead of what will happen to auto-buying and consumer discretionary income trends if bipartisan support for a "fiscal cliff" solution isn't in place.

It's also understandable to be cautious as we see how the Liberty Media (Nasdaq: LMCA  ) saga plays out.

It seems to be headed to an amicable resolution. Karmazin was scheduled to be a presenter at Liberty Media's investor meeting today, and Jayant's actually boosting his price target on Liberty Media from $115 to $123.

It would have been nice to see Sirius XM offer an early glimpse of blowout subscription numbers. It would have been spectacular to see it bump up some aspects of its seemingly conservative guidance. However, history shows that it's not always necessary.

The truth rests mere weeks away.

Running of the bulls
I recently put out a premium report on Sirius XM Radio, detailing the challenges and opportunities that await investors that are both long and short the dynamic media giant. A year of updates is also included with the report. Click here to check it out now.

Rick Aristotle Munarriz owns shares of Liberty Media. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On October 11, 2012, at 12:14 AM, TMFBreakerRick wrote:

    And -- just like clockwork -- Sirius XM DID post positive subscriber additions tonight. Well played, Mel. Well played.

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