In the midst of an earnings season that's seemingly delivered more discouraging news than not, satellite radio outfit Sirius XM (SIRI -2.62%) is something of a bright spot. As of 11:41 a.m. ET today, its stock is up 10.1% in response to better-than-expected fourth quarter numbers.
Just keep them in the proper perspective.
The quarter that was
For the three months ending in December, Sirius XM turned $2.19 billion worth of revenue into adjusted EBITDA of $691 million. Sales and earnings both topped expectations.
Image source: Getty Images.
Perhaps more important, however, the company was finally able to reverse the slow deterioration of key aspects of its business. Its top line improved on the year-ago comparison (albeit only slightly), for instance, while Sirius XM's subscriber headcount grew for a second consecutive quarter, accelerating from Q3's net additions of 11,000 to 118,000 net adds in Q4. The company also reported a 5% year-over-year improvement in quarterly free cash flow, while confirming 2026's results would look about the same as 2025's.
That being said, it's worth adding that investors as a whole may have begun today's trading day already primed to buy anything even remotely safer than now-struggling artificial intelligence stocks, or to look for dividend-paying names that can continue making these payments regardless of what happens to AI stocks from here. With a forward-looking yield of 5.2% based on a dividend that's been paid and raised like clockwork for several years now, SIRI stock may suddenly be seen as a safe-haven.
An outlier day
The chief problem with fear-driven, knee-jerk moves like this one is that they can and do fade as quickly as they take shape. And in SIRI's case, the stock's recent action doesn't indicate there's been any interest in sustaining efforts like this one to shake shares out of their bigger-picture rut.
NASDAQ: SIRI
Key Data Points
It's also too soon to presume Q4's measurable improvements on a couple of fronts are the new norm. Fourth-quarter strength from this company isn't anything unusual, and lately, this year-end improvement has been unwound more often than not by the middle of the following year. Moreover, while Sirius XM experienced satellite customer growth, its streaming business (Pandora) continues to lose them.
In other words, Thursday's surge is far from being guaranteed to mark the beginning of a new uptrend. The above-average dividend yield is still this ticker's best long-term bullish argument.
