The race to a buck for Sirius XM Radio (NASDAQ:SIRI) investors has a seemingly early finish line.

"When will Sirius XM hit the $1 mark?" I asked in a poll yesterday.

With 4,800 voters hitting the virtual ballot box as of this morning, the tally isn't even close.




Over the next few weeks or months



Not until next year






My vote? I went with the second option. There are good things happening at Sirius XM from a cash-flow and cost-containment perspective, and those rewards will come in time.

Most of the poll respondents aren't as patient. Fully 76% believe that shares of Sirius XM will hit the $1.00 mark later this year.

That's a pretty bold majority. Sirius XM closed at $0.70 yesterday. Another $0.30 might seem like pocket change, especially for a stock that has come a long way since bottoming out at $0.05 six months ago. However, on a percentage basis, Sirius XM's stock would have to climb 43% over the next four months.

Is that realistic? Well, many of the market's most downtrodden stocks have roared back over the past few months:

  • Bank of America (NYSE:BAC) shares have grown sevenfold since March.
  • Crocs (NASDAQ:CROX) is an eight-bagger since hitting rock bottom in November.
  • Dollar Thrifty Automotive Group (NYSE:DTG) is almost a 40-bagger since March's bottom.

The market was clearly overly pessimistic when the rally began in March. Is it overcompensating on the optimism now?

Sirius XM battled back from the brink of bankruptcy in February. Losses are narrowing. It's issuing credit on more favorable terms. This is a more stable company than the one we saw flopping around in February. The number of net accounts has been dwindling, but the same can be said for other entertainment subscription services such as DISH Network (NASDAQ:DISH) and TiVo (NASDAQ:TIVO).

However, Sirius XM is also a company with billions of shares outstanding, and that's not including the 40% stake in preferred shares that it awarded Liberty Capital (NASDAQ:LCAPA) earlier this year.

The higher the stock has gone, the higher the expectations. Sirius XM has lived up to the hype on the cash-flow front, but every nickel in share-price appreciation from here will be harder to earn than the one before it.

Sirius XM is here to stay. Can the same be said for speculators, if the stock doesn't break the one-buck ceiling this year?

More news than static:

Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He owns shares of TiVo and is a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.