History will look kindly on how 2019 played out for Sirius XM Holdings (NASDAQ:SIRI). The shares have yet to take out the 14-year highs they set in the springtime of last year, but it's another winning year for the resilient satellite-radio provider. Sirius XM closed last week at its 2019 peak, and the 27% dividend-adjusted gain will easily stretch its impressive streak of positive returns to 11 years in a row.

This is also the year that Sirius XM closed on its $3.5 billion purchase of Pandora Media, opening the door for Sirius XM to make a larger dent in the streaming market that's growing faster than its flagship business. Sirius XM is on a roll right now, but there will be challenges in the year ahead. Let's look at some of the things that can go wrong in 2020. 

Katy Perry at a radio interview for Sirius XM.

Image source: Sirius XM Holdings.

1. We could be at peak Pandora

There are a lot of reasons to like the acquisition of Pandora that closed 11 months ago. Revenue growth naturally was kicked up a notch, given the incremental nature of any purchase, but the excitement here stems from the cross-selling potential. Pandora listeners will be exposed to Sirius XM's namesake radio platform, and more importantly, the folks paying for satellite radio are an ideal target audience for Pandora's premium offering. 

No deal is perfect, though, and this is no exception. One of the reasons Pandora was available at a reasonable cost -- the $3.5 billion price tag is now less than 10% of the enterprise value of the combined company, despite Pandora contributing more than 20% of the revenue -- is that profitability was spotty and the app's streaming audience was starting to thin out.

Pandora has helped offset the slide through gains in advertising and getting more of its free users to pay for premium features. However, even those gains are starting to slow. Pandora's top-line growth slowed to 7% in its latest quarter, matching the gain at Sirius XM. If Sirius XM isn't able to improve Pandora's profitability or find a way to get listener growth to increase or at least stabilize, it could weigh on the stock in 2020.

2. Negative auto trends can continue

Satellite radio makes up the lion's share of Sirius XM's revenue, and that means that it's at the mercy of strong auto-ownership trends. A satellite-radio subscription comes at a fixed monthly cost, and the value proposition is only as strong as a car that's being used. Consumers -- particularly young people -- aren't buying cars the way they used to. 

U.S. auto sales have declined in 2019, and industry experts are bracing for the weakness to continue into 2020. Sirius XM's subscriber count continues to grow, despite the ownership headwind. Sirius XM has a record 34.6 million total subscribers, a number that should continue to grow at a low-single-digit pace unless car sales take a sharper turn for the worse. 

3. Audio entertainment can evolve

Sirius XM has been one of the best-performing stocks over the past 10 years, and it's done so by climbing a wall of worry. A few years ago, bears would argue that satellite radio would be a transitory technology, eventually displaced by apps streaming through connected cars. Automobiles are now in tune with your phone, but the creature comforts of Sirius XM continue to scratch out a growing audience. 

Sirius XM offered a better mousetrap to terrestrial radio, and while streaming apps have their advantages -- primarily cost, range, and personalization -- there's still something appealing about satellite radio. If a truly superior product with marquee content does roll out, things will get interesting, and that naturally would trip up Sirius XM's standing as a market-thumping growth stock.