Siri

Source: Sirius XM.

Sirius XM Holdings (NASDAQ:SIRI) has been one of the market's biggest winners since bottoming out at $0.05 -- yes, a nickel -- five years ago. However, it's been a bit of a laggard in 2014. 

Shares of the satellite radio provider began the year at $3.49, and that's essentially where investors find themselves today. Unless the stock rallies in the final weeks of 2014, this will snap a streak of five consecutive years of positive returns.

Sirius XM seems to have become a stagnant stock, but it's unlikely to stay that way. It's been trading in a tight range in recent months, but let's look at some of the things that could drive the stock higher.

1. Revenue growth can start to accelerate
Sirius XM's revenue keeps moving in the right direction, but it's doing so at a slowing pace. Revenue climbed 13% in 2012, 12% in 2013, and has inched 11%, 10%, and 10%, respectively, through the first three quarters of 2014. Sirius XM's guidance points to 9% top-line growth for all of 2014, and analysts see revenue climbing at an 8% pace in 2015.

The trend is clear, and it isn't a surprise for a maturing media giant. Sirius XM pushed through two price hikes over the past three years -- and its subscriber base continues to grow -- but it's not easy to step on the accelerator when you're a premium audio platform with 26.7 million subscribers.

This could change, and not just through the more obvious paths of accelerating user growth or yet another rate pricing increase. Sirius XM could get better at monetizing its ad-based channels with stronger advertising rates. It can improve its streaming platform, driving more revenue out of customers willing to pay extra for mobile as well as receiver-based access. Sirius XM can build on last year's acquisition of Agero's connected vehicle service unit, milking more money out of its users through telematics offerings. 

Revenue growth is important given Sirius XM's scalable model. A modest uptick on the top line has translated in the past into much larger growth in operating profits and earnings. Picking up the tempo would go a long way here.

2. Sirius XM can sign up the next Howard Stern
The biggest event in the still brief history of satellite radio was when Howard Stern signed with Sirius nearly a decade ago. It changed the game. It legitimized satellite radio as a premium audio offering, and it gave the smaller Sirius the credibility to not only combine with the larger XM in a merger of equals but to have Sirius' top brass at the helm of the new company.

Stern's decision to stick it to the FCC restrictions of terrestrial radio paid off, and when his initial five-year deal was coming to a close in late 2010 he signed on for five more years. Unless something dramatic happens in the next year and changes, Stern will probably move on at the end of next year. His absence will create a void unless Sirius XM lands some equally magnetic talent.

It won't be easy. Terrestrial radio is no longer a potent farm club for Sirius XM to mine for celebrities. We don't listen to traditional radio the same way that we used to, making it harder for a head-turning on-air personality to cultivate the kind of radical following that Stern had at his terrestrial radio peak. That still can't stop Sirius XM from looking. It will be hard to justify another pricing increase if it doesn't allocate the money that it's paying Stern elsewhere.

3. Buyout buzz can start to percolate
Sirius XM may seem like an odd choice to be played up as an acquisition target. It has nearly 6 billion fully diluted shares outstanding, and an enterprise value of $24 billion. However, it's been aggressively buying down its share count, and it also has a majority stakeholder that isn't afraid to make a deal.

Who would want Sirius XM? Cable and satellite television providers would be logical buyers. As a monopoly in satellite radio with a sky-high barrier to entry, Sirius XM is in a unique position. It is growing, unlike the pay TV industry as a whole. It's not at the mercy of escalating programming costs or cutthroat competition. It has the freedom to load up on proprietary content or to kiss off any content that isn't cost effective. These are all unique characteristics that make Sirius XM a differentiated platform in an otherwise cluttered realm of media companies. It's an original, and that could be worth even more than its seemingly hefty enterprise value in a buyout.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.