This is a negative equity company.....it's debt load is not a burden but it's investment vehicle. You CAN argue if a catastrophic event happens Siri is underwater (like covid). However, looking forward Siri's revenue has maintained steady even in the advent of streaming services. Communication companies always have high debt loads but also incredible moats. Just think to yourself: "Let's build a satellite, send it to space, and maintain it." There debt is a cost of operation! which by the way is about on average per year a good ratio of their operating income. Everything that is leftover is given to shareholders. They keep no capital and have the shareholders completely in mind. Also their telecommunication assets are worth a lot of money, IF they were to fail as a company the big telecommunications would easily buy this company for their assets.
Evaluate their competitive advantage! [SiriusXM] Comes incorporated into new car purchases and they hook older demographics because of ease of syncing with their cars and unique programming listeners really enjoy that can only be found from them. As long as they can cover their debt they can keep this cash flow positive business generating income for investors.
I didn't use chatgpt for this, so please excuse my typos and my attempt at just giving my perspective without accounting numbers. You can do this yourselves....it's super fun anyways. ;)
How well do narratives help inform your perspective?
Disclaimer
The user ValueMan holds no position in NasdaqGS:SIRI. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
