Image source: Sirius XM.

It's a good time to be an investor in satellite radio. Shares of Sirius XM Radio (SIRI -1.29%) closed out last week at $4.19. That may not seem like a lot, but it's actually the stock's highest close since early 2007. 

Hitting an eight-year high is a pretty big deal. It means that the stock is a nearly 84 bagger since bottoming out at $0.05 in early 2009. This also means that Sirius XM has never commanded a market cap this high. The last time the stock traded this high there were a lot fewer shares outstanding. Sirius had yet to join forces with XM, a move that doubled its shares outstanding. Sirius XM had yet to turn to Liberty Media (FWONA) for financing, a move that found it bumping its share count by 67%. 

Sirius XM has been aggressively buying back its stock, but not enough to take the share count back to where it was just before the Liberty Media bailout. 

At least one investing celebrity is still bullish on the stock despite its inflated share price. 

"Hold on to SIRI," CNBC's Jim Cramer advised during Friday's Mad Money show. "They've got a good business model and it's a play on cars, actually."

It's fair to call Sirius XM a play on cars. It may sell portable home receivers and offer online streaming as a stand-alone service, but it will always be consumed primarily by drivers. One can argue that this makes Sirius XM an unattractive play on the auto boom. Sirius XM trades at 42 times trailing earnings, and if we look out to 2016 it fetches a still steep multiple of 28. Most automakers trade at far more compelling ratios, making Sirius XM an odd choice to be riding the auto industry's coattails -- or mud flaps, if you will.

However, Sirius XM should grow at a much headier clip than the auto industry through the next few years. For starters, it has bumped its standard rate by 16% over the past four years, outpacing the price for cars. 

More importantly, the number of cars with factory-installed Sirius or XM receivers continues to grow. A whopping 75% of new cars roll off the assembly line with a satellite radio, but just a third of all cars on the market currently have access to Sirius or XM. Work the math of new car production, and it's easy to see why satellite radio's penetration will continue to grow. 

So, sure, Sirius XM hitting an eight-year high is pretty impressive. However, as its potential audience growth expands and its active subscribers pay more this scalable media model should continue to set new multiyear highs.