It's been a bumpy few weeks for Sirius XM Holdings (NASDAQ:SIRI) since the stock peaked at $7.70 last month. We've seen a pair of analyst downgrades on valuation concerns. And the shares kicked off this week trading 8% lower than their mid-June highs despite the general market inching slightly higher in that time. 

Sirius XM investors aren't exactly in a world of hurt. The stock remains one of the market's biggest winners since bottoming out in early 2009, and it's still crushing the market in 2018 with a 33% year-to-date gain. However, the stock's recent correction found at least one Wall Street pro putting out a bullish note on the satellite radio provider last week. Opportunity appears to be knocking, but the market may not be brave enough to answer.

Dolly Parton in a Sirius XM Town Hall interview.

Dolly Parton in a Sirius XM interview. Image source: Sirius XM Holdings.

A new bull in the pen

Credit Suisse analyst Doug Mitchelson jumped into the fray last week, initiating coverage of Sirius XM with an outperform rating. Despite the company's decelerating revenue growth and lingering concerns about connected cars and slowing car sales, Mitchelson argues that there are catalysts on the near horizon.

Sirius XM may not seem cheap these days (even after the recent pullback), but Mitchelson feels that the stock's aggressive share buybacks will help drive the stock higher. He has a price target of $8.50 on the stock, now the highest price goal among major Wall Street firms. 

Mitchelson's right about Sirius XM's voracious appetite for eating its own cooking. Sirius XM's fully diluted share count has declined every year since topping 6.8 million in mid-2011, and it's now nearly a third below its peak count. Future buybacks at current levels won't have the same kind of impact. The stock's buoyant share price and free cash flow stabilizing will mean less bang for its buyout buck.

Gnawing away at its massive and still substantial share count has been the right thing to do. It sure beats the many other companies that have wasted their money by repurchasing shares when their stocks are on the way down. However, it won't be as easy to prop up profits on a per-share basis when the share-count declines start to decelerate. 

Sirius XM can still win, and there's no reason why it can't hit Mitchelson's seemingly ambitious target. We'll learn more about how Sirius XM is holding up financially when it reports fresh quarterly results next week. A blowout report is an easy way for one of the market's hottest stocks this decade to get back on track.