Audio entertainment company Sirius XM Holdings, Inc. (SIRI) reported better-than-estimated performance for the fourth quarter on both its top-line and bottom-line fronts, earlier this week.
Q4 revenue increased 4.2% year-over-year to $2.28 billion, outperforming estimates by $38 million. Earnings per share at $0.08 came in ahead of expectations by $0.01. During 2021, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) reached a record $2.77 billion, and it added over 1 million net new SiriusXM self-pay subscribers.
Further, SIRI has declared a special dividend of $0.25 per share, which is payable on February 25 to investors on record as of February 11.
With these developments in mind, let us take a look at the changes in SIRI’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Sirius XM’s top risk category is Tech & Innovation, contributing 29% to the total 35 risks identified.
In its recent report, the company has changed one key risk factor under the Ability to Sell risk category. Compared to a sector average of 16%, SIRI’s Ability to Sell risk factor is at 29%.
SIRI noted that to monetize listener hours it needs to penetrate local advertising markets and offer compelling ad product solutions. SIRI is continuing to build its sales abilities to penetrate local advertising markets where it competes with terrestrial radio.
The risk remains that if the company is not able to maintain revenue growth from its advertising products, then its operations may see an adverse impact.
Hedge Fund Activity
TipRanks data points that Wall Street’s top hedge funds have increased holdings in Sirius XM by 314.8 thousand shares in the last quarter, indicating a neutral hedge fund confidence signal in the stock based on activities of 9 hedge funds. Importantly, Warren Buffett’s Berkshire Hathaway has a holding worth $266.3 million in SIRI.
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