The upbeat guidance that Sirius XM Radio (Nasdaq: SIRI) issued a week ago is finally sinking in.

Well, sort of.

Lazard Capital Markets' analyst Barton Crockett updated some of his projections for the satellite-radio provider. He's raising his 2010 net subscriber addition target from 613,000 to 754,000. He originally banked on seeing Sirius XM generate $22 million in free cash flow on $2.73 billion in revenue, but has revised those metrics higher. He now sees $107 million in free cash flow and $2.76 billion in revenue.

Encouraging, right? Crockett's rockets are actually just ahead of the rosy update Sirius provided last Monday. However, Crockett is simply reiterating the $1.35-per-share price target that's part of his "buy" rating.

Maybe it's just me, but I'd like to think that healthier fundamentals should ultimately command higher valuations.

History may shine kindly on Sirius XM's month. The media powerhouse kicked May off with its first quarter that was better than simply breakeven. Investors may have been initially frustrated that Sirius XM didn't raise its guidance, yet that sweet reward came two weeks later.

Why is Sirius XM's stock trading 13% lower through the first three weeks of this positive month on the news front? Well, it may very well be related to the reason Crockett held his ground on the company's price target despite jacking up some key performance metrics.

The market itself has turned, as I discussed last week.

Although Sirius XM is clearly growing again, plenty of companies are doing exactly that. Even traditional radio-station operators -- the ones that Sirius XM seemingly made obsolete -- are thriving again. Entercom (NYSE: ETM) and Radio One (Nasdaq: ROIAK) have posted strength in their terrestrial-radio operations in their latest quarters.

When the market is belching something bearish, a good report may not be good enough. Sirius XM investors need to hope for a general market turnaround or a more aggressive upgrade in guidance to buck the malaise. Both scenarios would leave analysts with little choice but to bump their share-price targets higher.

Can Sirius XM's stock appreciate in a falling market? Share your thoughts in the comments box below.

Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM, but he owns no shares in any of the stocks in this article. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. Try any of our Foolish newsletter services free for 30 days. The Fool has a disclosure policy.