By Brandon Matthews
Murray Arenson of Janco Partners has resumed coverage of Sirius XM Radio (SIRI) with an ACCUMULATE rating and a price objective of .80.
Stating a belief that Sirius XM has in fact turned away from a subscriber growth story to a cash flow growth story that stems from Sirius XM posting four consecutive quarters of positive adjusted EBITDA. Mr Arenson was also impressed with the statement from Sirius XM that .70 of every incremental dollar of revenue now falls to the bottom line given its fixed cost infrastructure.
Mr. Arenson also cited growing cash flows, a return to positive subscriber growth, incremental revenue additions, lower operating expenses, extended debt maturities and overall balance sheet improvements. He also noted the value of the company’s attempts to capitalize on the certified pre-owned auto market.
Under Janco’s rating system, an accumulate rating is defined as:
The Company possesses solid fundamentals, above average growth opportunities and/or is expected to outperform the market averages by 5-20% over the longer term. In addition, in the Analyst’s opinion, there is only a moderate risk of long-term capital loss even if there is potential for short-term trading volatility due to specific event risk.
Again, Satwaves readers are cautioned to not act on any specific recommendation and to seek the advice of a financial professional to determine a particular investments suitability to their own individual needs. This information is provided for informational purposes only.
Price target looks to be very conservative to me. Great news nevertheless!
Excellent! Coverage is picking up again and you are getting all the reports on EBITDA growth!
Can you give us Janco’s 2010 EBITDA estimate?