Satellite radio has taken some meaty strides this year. By the end of the year, XM Satellite Radio
In its annual re-ranking, the two upstarts will be joined by other recent high-risers like Autodesk
Both companies combined to lose more than $900 million last year on a little more than $100 million in revenue. While each company has grown its top line significantly this year on the heels of soaring subscriber growth, they have already lost as much through the first three quarters of 2004 as they did last year.
It's not that the industry is judged solely by its profit and loss statements. Satellite television giant DirecTV
That doesn't mean that satellite radio will never become profitable. While programming costs have been escalating as both players continue to shore up their lineups to lure listeners away from free radio, the economies of scale are likely to kick in over time. You also have various premium channel and advertising kickers to consider.
However, with both companies closing in on $20 billion in combined market capitalization, is the induction into the Nasdaq-100 an indication that the easy gains -- if there ever is such a thing -- have already been made?
Our new Rule Breakers newsletter likes to single out stocks early in their growth cycle. The promising niche of satellite radio certainly fits the bill on the growth side but the widespread popularity of the shares these days makes it unlikely to feel like much of an early discovery. Now even index investors will have a piece of the satellite radio revolution. It's a bittersweet notion.
Did it surprise you to learn that both XM and Sirius are now two of the most valuable companies on the Nasdaq? Which way are the stocks headed in 2005? All this and more -- in the Sirius and XM Satellite Radio discussion boards. Only on Fool.com.Longtime Fool contributor Rick Munarriz thinks that satellite radio will be a huge industry in the years to come. However, he does not own shares in any of the companies mentioned in this story. He is a member of the Rule Breakers analytical team, seeking out tomorrow's great growth stocks today.