Sirius XM's (SIRI) Expanding Auto Partner Base to Aid Growth

Sirius XM Holdings’ SIRI expanding partner base of automakers is driving the adoption of its audio entertainment services.

The company recently inked a partnership agreement with BMW that makes its audio entertainment service a standard feature in all BMW models sold in the United States, beginning 2021 and through 2026. It provides SiriusXM access to the entire BMW flagship, which includes all Rolls Royce models, BMW motorcycles and all mini vehicles.

BMW adds to the long list of automakers that have long-term relationships with SiriusXM. Notably, General Motors GM extended its relationship with SiriusXM till 2027. The company benefits from the increasing adoption of its 360L platform with General Motors.

The satellite radio provider also inked a long-term agreement with Toyota Motors. The companies extended their deal till 2028, starting with 2020 Toyota models.

Sirius XM has also inked extended connected vehicle agreements with Nissan and Infiniti till 2022. Additionally, the company extended agreements with OEMs like Audi, Mazda, Land Rover, Mercedes-Benz, Jaguar and Volvo to install its services in their vehicles by the end of 2020.

Sirius XM Holdings Inc. Price and Consensus

Sirius XM Holdings Inc. Price and Consensus

Sirius XM Holdings Inc. price-consensus-chart | Sirius XM Holdings Inc. Quote

Expanding Subscriber Base to Help SiriusXM Recover

SiriusXM’s shares have declined 18.3% year to date compared with the Zacks Broadcast Radio and Television industry’s growth of 24%.

The underperformance can be attributed to coronavirus-led disruption over advertising spending. Notably, in second-quarter 2020, total revenues on a reported basis declined 5.2% year over year to $1.87 billion.

Nevertheless, this Zacks Rank #2 (Buy) company is expected to benefit from subscriber base expansion owing to a strong content portfolio. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

Expanded podcast efforts fit well with the existing advertising-led focus on Pandora and AdsWizz. In fact, the availability of its content on Amazon AMZN Echo devices, Alexa and Alphabet’s GOOGL Google assistant is expected to expand the subscriber base further.

Moreover, expansion of the satellite broadcasting agreement with The National Football League to include additional streaming rights starting this 2020 season bodes well for SiriusXM. For the first time, the company’s customers with the streaming-only SiriusXM Premier subscription will have access to every live NFL game as well as the exclusive 24/7 talk channel, SiriusXM NFL Radio.

Additionally, SiriusXM and CNN launched CNN Originals, a new channel showcasing the premier non-fiction series from CNN and HLN beginning Sep 18.

These content additions are expected to drive the subscriber base. Markedly, on Sep 9, the company announced that it is increasing its 2020 guidance for SiriusXM self-pay subscriber net additions to approximately 700K from the prior guidance of more than 500K.

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