One of the more surprising winning streaks on Wall Street -- Sirius XM Holdings (SIRI -1.59%) delivering 11 consecutive years of positive shareholder returns -- came to an end in 2020 when the stock took a 9% (dividend-adjusted) hit. It's now working on its second consecutive year of negative shareholder returns.

Sirius XM seemed like a no-brainer play on the recovery from the COVID-19 crisis. Folks were getting out of the house again, and getting back into their cars where satellite radio is largely consumed. It should've been a roll call of reactivated subscriptions and new car sales. It wasn't. 

Car sales have started to slow again after an initial pop in the first half of this year. The company's growth did accelerate compared to its depressed 2020 results, but that apparently hasn't been enough to impress the market. Sirius XM has been up and down all year -- but in the losing category more often than not. Now it's close to getting back into positive territory, but it was still trading 4% lower in 2021 through Tuesday's close, even adjusted for its quarterly distributions.

Let's look at what has happened so far, and consider what it would take for Sirius to start a new winning streak before the end of 2021.

Sirius XM receiver on a dashboard.

Image source: Sirius XM Holdings.

Turn down for what?

Satellite radio is alive and well. Sirius XM Holdings had a record 31.4 million self-pay subscribers as of the end of June. It expects to end the year with 1.1 million more self-pay accounts than it had when 2021 began. Earlier this year, it was only targeting 800,000 net additions. 

The 15% year-over-year increase in revenue that it posted in the second quarter was its strongest organic uptick in more than a decade. One caveat here, though, is that revenue had a rare decline of 5% in the second quarter of last year, but we're still looking at nearly 10% growth from where it was in Q2 2019. 

The stock was trading slightly higher year to date at the end of 2021's first half, but the momentum shifted as COVID-19 cases started to spike again due to the Delta surge and new car sales slipped due to supply chain issues. JPMorgan analyst Sebastiano Petti downgraded Sirius XM late last week, shifting to a neutral stance on the stock. The combination of softening auto sales and rising capital expenditures on Sirius XM's end in launching new satellites have left him cautious about the company's near-term prospects. 

Sirius XM's business has always been at the mercy of the auto industry. In the early years, when folks were able to buy cars with factory-installed satellite radio receivers for the first time, that was a good thing. It's a different game now as more people are just trading in one car with a Sirius XM receiver for another. Between the decline in new vehicle sales and waning consumer demand for its service, growth may be more challenging to come by for the company in the coming year. Petti has lowered his forecast for 2022 self-pay net additions from 1.05 million to 750,000. 

The best shot that Sirius XM has to get its share price out of the red for the year will come on Oct. 28, when it delivers its third-quarter results. Expectations are low heading into the report -- natural, given the auto industry headwinds. Sirius XM has historically raised its full-year forecasts at these quarterly check-ins, but this time around, just holding firm will be a victory.

Sirius XM has become a profitable media company, and it generates a ton of free cash flow -- much of which it uses to repurchase stock and boost its dividend. However, it will have to earn its way out of its two-year rut. We're beyond the point where content deals could push the stock higher. It has announced smart partnerships lately with popular podcasts and celebrities, but investors are more concerned about the problematic trends playing against its growth. The earnings report coming in two weeks will likely determine whether or not Sirius XM ends 2021 on a positive note.