Shares of Sirius XM Radio (Nasdaq: SIRI) hit two bucks yesterday, but a Wall Street analyst is giving his two cents worth of caution this morning.

Lazard Capital's Barton Crockett -- who has a $2 price target on the satellite radio giant -- is downgrading the stock. Crockett is going from buy to neutral, pointing to Liberty Capital (Nasdaq: LCAPA) as the smarter play. Liberty Capital owns a 40% preferred share stake in Sirius XM that is worth roughly $5 billion at the moment.

Crockett isn't the first analyst to suggest Liberty Capital over Sirius XM. The argument has been raised time and time again over the past two years. The point has been moot, though. Both stocks have managed to pull off market-thumping returns. It's a matter of choosing one gold-paved road over another.

Is Crockett simply trying to steer his clients out of the stock ahead of next week's quarterly report? He might be, though it's not as if he expects a bombshell out of the satellite radio star. Sirius XM reports come Tuesday morning, and analysts see a profit of $0.01 a share on revenue growth of 10%.

These are conservative targets. Sirius XM has been largely profitable over the past year and change. The top-line mark is also achievable. It's true that the addition of music royalty fees in the latter half of 2009 contributed to more than half of last year's 14% revenue spurt. The royalty boost no longer exists as a way to pad revenue. However, there are a few catalysts that can keep the top line chugging along nicely.

  • New auto sales remain robust.
  • Conversion rates and churn continue to trend favorably.
  • The first quarter was the first time that Howard Stern's show became available through Sirius' smartphone app.

The last point is important. Sirius XM rolled out a premium streaming app for Apple (Nasdaq: AAPL) iOS devices two summers ago. Applications for Research In Motion (Nasdaq: RIMM) and Google's (Nasdaq: GOOG) Android smartphones followed. Premium streaming didn't really catch on because users forking over serious money for costly data plans are unlikely to spend even more for buffered audio. However, another setback was that Stern's iconic channels weren't part of the package. Stern 100 and Stern 101 were made available on smartphones in January as part of Stern's new five-year deal. We'll see whether the offering has gained any traction.

Even if Crockett isn't worried about Tuesday's numbers, why bail? Didn't he learn from Wunderlich's untimely downgrade last month at a much lower price point?

He could have a sense of history. Sirius XM's stock has been rallying lately. As I pointed out late last year, Sirius XM has a tendency to pop higher on earnings when the stock's been sluggish -- and fall back when the stock's been hot. In other words, the recent sprint toward the ballyhooed $2 mark may be discounting even a blowout quarter.

CEO Mel Karmazin has ammo to overcome the potential letdown. He could point to higher subscription prices when Sirius XM 2.0 becomes available later this year. He could reveal strong smartphone streaming accounts post-Stern. Silence may result in a slight dip on Tuesday, but Sirius XM continues to trend higher in the long run.

A lukewarm analyst doesn't change that.

How do you think the market will respond to next Tuesday's quarterly report? Share your thoughts in the comment box below.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.