Assessing Sirius XM After Podcast Investments and Major Automotive Deals in 2025

If you’re trying to figure out whether to hold, sell, or maybe even buy more shares of Sirius XM Holdings, you’re certainly not alone. The stock has caught the eye of investors looking for clarity; after all, it’s had an undeniably eventful run. While shares have nudged up slightly by 0.1% over the past week, what really stands out is the bumpy longer-term ride, with declines of 5.2% over the past month and a sharper 15.1% dip in the last year. Zooming out further, Sirius XM is down more than 61% over three years and over 56% across five years. Those numbers might make some investors uneasy, but context matters.

Recently, headlines have focused on Sirius XM’s ongoing strategy to evolve beyond the traditional satellite radio model. News of expanded deals with major automakers and deep investments in podcasting signal a drive to capture fresh audiences. However, even with this innovation, the changing landscape of in-car entertainment and growing competition from streaming platforms mean that the risk profile and potential growth path has shifted in the eyes of many market watchers. The company’s share price reflects these mixed signals, oscillating between optimism and worry.

With a value score of 5 out of 6 possible checks for being undervalued, Sirius XM stands out as potentially attractive for bargain hunters. But what does that valuation actually mean in practice? In the next section, we’ll break down the valuation methods behind that score, and later, look at a smarter way to evaluate whether Sirius XM’s price truly sets the stage for future gains.

Sirius XM Holdings delivered -15.1% returns over the last year. See how this stacks up to the rest of the Media industry.

Approach 1: Sirius XM Holdings Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's true value by projecting future cash flows and discounting them back to their present value. This approach focuses on how much free cash Sirius XM Holdings can generate over time and what that stream of cash is worth today.

Currently, Sirius XM reports annual Free Cash Flow of about $1.15 billion. Analyst estimates extend up to 2029, with projections indicating Free Cash Flow could reach approximately $1.55 billion by that year. The ten-year outlook, beyond analysts' explicit forecasts, is achieved by extrapolation using growth assumptions from Simply Wall St.

Using these projections, the model assigns an intrinsic value of $65.77 per share to Sirius XM. The DCF calculation implies a 67.5% discount to the intrinsic value, so the stock appears significantly undervalued compared to what future cash flows suggest it's worth today.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Sirius XM Holdings.

Our Discounted Cash Flow (DCF) analysis suggests Sirius XM Holdings is undervalued by 67.5%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Sirius XM Holdings Price vs Sales

Price-to-Sales (P/S) is a widely used valuation metric for assessing companies like Sirius XM Holdings, especially in industries where earnings can be volatile or affected by non-cash items. For profitable businesses with consistent sales, the P/S ratio offers investors a straightforward way to measure how much they are paying for each dollar of revenue generated by the company.

What constitutes a "normal" or "fair" Price-to-Sales ratio often depends on market expectations around the company's future growth and perceived risk. If investors expect rapid revenue expansion or improvements in profit margin, they are usually willing to pay a higher multiple. Increased risk or stagnating growth tends to push the ratio lower.

Currently, Sirius XM trades at a P/S ratio of 0.84x. This is noticeably below the Media industry average of 1.08x and lower than its peer group average of 4.10x. To put this in better perspective, Simply Wall St offers a proprietary "Fair Ratio" for Sirius XM at 1.37x. The Fair Ratio is a more precise benchmark because it directly adjusts for the company’s specific growth outlook, earnings quality, risk factors, profit margin, market cap, and the broader industry context. By going beyond standard peer or industry averages, the Fair Ratio gives a sharper picture of what the market should reasonably pay for Sirius XM right now.

With Sirius XM's actual P/S ratio (0.84x) significantly below its Fair Ratio (1.37x), the stock appears undervalued based on this method.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Sirius XM Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your story behind the numbers—a clear, personalized perspective that explains why you believe a company like Sirius XM Holdings is worth a certain amount based on your assumptions about its future revenue, earnings, and profit margin.

Narratives connect a company’s story, such as its strengths, risks, and strategic moves, to specific financial forecasts and ultimately to a customized fair value. On Simply Wall St's Community page, millions of investors use Narratives to easily express their outlook, compare with others, and instantly see the fair value that results from their assumptions, all without needing to build complex models.

Narratives make investment decisions more dynamic and transparent, helping you decide when to buy or sell by showing how your assumptions (and fair value) stack up against the current price. They update automatically when new information such as earnings or news becomes available.

For Sirius XM Holdings, Narratives can be very different: one investor expects strong competitive advantages and sees a fair value as high as $50 per share, while another prices in slow revenue growth and sector risks, landing at $23.64. This demonstrates how the story you believe directly shapes your investment action.

Do you think there's more to the story for Sirius XM Holdings? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com