SIRIUSXM Radio Inc.
(
SIRI">SIRI
) recently announced that the company has completed the year 2011
with 1.7 million net customer additions, surpassing its previous
projection of 1.6 million net customer additions.
SIRIUSXM added approximately 1.16 million subscribers in the
first nine months of fiscal 2011 with an average of 386,000
customers per quarter.
However, in the last quarter, the company added nearly 540,000
customers, which in itself is the most since 2008, and helped the
company surpass the projected customer growth for the year.
We believe that the significant subscriber growth in the fourth
quarter was mainly attributable to the launch of SIRIUSXM 2.0
product suite and expansion of channel line ups (inclusive of Latin
channels).
SIRIUSXM 2.0 supports WiFi, Bluetooth, Internet, and will expand
its existing bandwidth by 25%. It also features time shifting,
replay, pause, rewind facilities and can be upgraded to higher
versions. Such an innovative product has brought about a radical
change in listening to radio music and has resulted in massive
subscriber growth for the company.
In December, 2011, SIRIUSXM launched the advanced version
SIRIUSXM 2.0 called "Lynx." Lynx is touted as the next-generation
satellite receiver that allows the subscribers to stream content to
home audio systems via Bluetooth. It also features high-resolution
touch screen support and allows 200 hours of music storage, hence
providing more options to the users to access their favorite music
anytime and from anywhere. Such innovative product launch will
certainly act as catalyst for growth going forward.
Despite higher programming costs and sluggish U.S. economic
growth coupled with stiff competition from Pioneer System and other
media players like
Cumulus Media Inc.
(
CMLS">CMLS
), we expect the company to perform well based on increased
programming line ups and improved ratings. We, thus, maintain our
long-term Outperform recommendation on SIRIUSXM .
Currently, the company has aZacks #3 Rank, implying a short-term
Hold rating.
Based in New York, SIRIUSXM provides satellite radio services in
the U.S. and Canada.
CUMULUS MEDIA (
CMLS
): Free Stock Analysis Report
SIRIUS XM RADIO (
SIRI
): Free Stock Analysis Report
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