Everyone loves a fast-growing share price. In addition to rewarding current investors, it gives prospective investors the opportunity to jump on the bandwagon in the hopes that shares will keep rising. This has been especially true with shares of Sirius XM Radio (SIRI).

With shares of the satellite radio provider rising by 32.4% since the beginning of the year, far outpacing the 18.7% of the S&P 500, there is no doubt that the company has been popular with investors. And rightfully so! When looking at the company's recent quarterly growth, it is clear why investors are excited. Over the past quarter alone, revenue has risen by 12.3% compared to the same quarter a year ago. More impressive still is the company's free cash flow growth. Despite the company's earnings being impaired by acquisitions, its free cash flow managed to grow by 54.8% for the first two quarters of this year compared to the same quarters in its 2012 fiscal year.

On top of the company's growth though, investors have become excited about two other things: margins and share buybacks.

Looking first at margins, we see that the company has seen a rather substantial increase in both its gross profit and operating margins over time. In short, the increase in the company's gross profit margin and operating margin has been attributable to it achieving economies of scale in terms of content, equipment, and other costs as it increases its market presence.

Pandora Media

Interestingly, when looking at Pandora Media (P), an Internet provider of radio services, we see a distinctly different trend in regards to its gross profit margin and operating margin. Whereas Sirius XM Radio's margins have been improving, Pandora Media's margins have slipped considerably. The decline in its gross profit margin has been primarily attributable to higher content acquisition costs as listener hours have increased, while its operating margin has been affected by higher employee-related expenses.

Based on this data, it would appear that Sirius XM Radio is the more attractive prospect. However, it would be easy to rationalize that Pandora Media is investing in itself now so that it may garner higher listener counts and, ultimately, higher profitability in the future. Though I tend to prefer a safer company that requires little investment to grow, Pandora Media may ultimately yield higher growth in the future. As such, it may be more attractive for investors seeking growth opportunities.

Share buybacks
In addition to attractive growth and improving margins, Sirius XM Radio has another thing going for it: it's investing in its future success. How, you might ask? Well, back in December of 2012, the company announced that it was planning on buying back as much as $2 billion worth of its own shares, amounting to a huge vote of confidence. Since the announcement, the company has acquired around $1.6 billion worth of shares. This alone is attractive enough. With only $400 million left under the original plan, however, the company announced another $2 billion share buyback this past week. This illustrates to shareholders just how much the company believes in itself.

As part of the transaction, the company agreed to acquire $500 million worth of shares from its majority owner, Liberty Media Corporation (FWONA), a media conglomerate which will still own around 51.6% of Sirius XM Radio following the acquisition. In accordance with its announcement, Sirius will buy $400 million worth of shares from Liberty in accordance with its previous but unfilled $2 billion buyback from 2012, and will buy the remaining $100 million under its recent $2 billion buyback program.

Although the remaining $1.9 billion of the company's recent $2 billion buyback may be acquired over time and at the company's discretion, it will be required to buy at least $130 million worth of shares from Liberty Media in November, $270 million in January of 2014, and the remaining $100 million in April of 2014. Even though this puts some obligations on the company, it is benefited by the fact that the deal stipulates that the shares it acquires from Liberty Media will essentially have a ceiling price of approximately $4.12 and a floor of $3.59. This means that even if the company's shares skyrocket, it will still buy between roughly 121 and 139 million shares for its $500 million in cash.

But is it worth it?
Based on the data discussed above, it's clear that Sirius XM Radio presents prospective and existing investors with some attractive opportunities. In addition to having attractive growth and margins, the company is returning money to shareholders in the form of share buybacks. These are all attractive catalysts, but just because something looks good doesn't mean you should necessarily buy it. You see, while the company seems to have a certain appeal, the Foolish investor should be mindful of the price they are paying for the value they receive.

In the case of Sirius XM Radio, that price is high. By buying shares today, investors are paying 43.4 times 2013 estimated earnings and 32.6 times 2014 estimated earnings. Another way to look at the situation is from a free cash flow perspective. Using the company's 2012 free cash flow per share and comparing it to its current price, investors are paying a steep 29 times. This doesn't mean that Sirius XM Radio is a bad investment, of course. Rather, it might just mean you will have to wait a while for it to pay off, which isn't always a terrible thing if you are holding for the long-term.