Has The Recent Sirius XM Rebound Created a Fresh Opportunity for Investors in 2025?
December 7, 2025
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If you have ever wondered whether Sirius XM Holdings is a quietly undervalued opportunity or a value trap in plain sight, you are exactly who this breakdown is for.
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The stock has climbed 3.6% over the last week and 1.5% over the past month, even though it is still down 18.3% over the last year and around 60% over three and five years, which makes the recent bounce especially interesting.
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Investors have been digesting a mix of headlines, from ongoing subscriber trends and partnerships that keep Sirius XM integrated into new vehicles, to the competitive pressure from streaming heavyweights reshaping how people pay for audio content. Together, these developments help explain why sentiment has been shifting even as the long term share price record remains weak.
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On our valuation checks, Sirius XM scores a 4/6 on perceived undervaluation, as laid out in this valuation score. Next, we will walk through what different valuation methods say about that score, before finishing with an even more powerful way to think about the company’s true worth.
A Discounted Cash Flow model estimates what a business is worth by projecting its future cash flows and then discounting them back to today in $ terms. For Sirius XM Holdings, the latest twelve month free cash flow is about $1.24 billion, and analysts plus Simply Wall St projections see this rising gradually over time.
Looking ahead, forecast free cash flow reaches around $1.40 billion by 2026 and climbs to roughly $1.73 billion by 2035. This is based on a 2 Stage Free Cash Flow to Equity model that blends analyst estimates for the next few years with extrapolated growth beyond that. These projected cash flows are then discounted back, year by year, to arrive at an estimated intrinsic value of about $74.33 per share for NasdaqGS:SIRI.
Compared with the current share price, this implies the stock is trading at roughly a 70.4% discount to its estimated fair value. This suggests the market is pricing in a much weaker long term outlook than the cash flow model implies.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Sirius XM Holdings is undervalued by 70.4%. Track this in your watchlist or portfolio, or discover 907 more undervalued stocks based on cash flows.
For consistently profitable companies like Sirius XM Holdings, the price to earnings, or PE, ratio is a straightforward way to gauge how much investors are paying for each dollar of current profits. In general, faster growing and lower risk businesses tend to justify a higher, or more generous, PE multiple, while slower or riskier names typically deserve a lower, more cautious, multiple.
Right now, Sirius XM trades on a PE of about 7.47x. That is higher than the 5.35x peer average, but well below the broader Media industry average of around 15.49x, which paints a mixed picture if you only look at simple comparisons. To refine this, Simply Wall St uses a Fair Ratio, its proprietary estimate of what PE the stock should trade on given its growth outlook, profitability, industry and size. For Sirius XM, that Fair Ratio is 17.31x, comfortably above the current 7.47x. This suggests the market is not fully recognizing the company’s earnings power once its risks and prospects are properly balanced.
Result: UNDERVALUED
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1452 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework that lets you turn your view of a company into a clear story tied to numbers like future revenue, earnings, margins and ultimately fair value. On Simply Wall St, Narratives live in the Community page and are used by millions of investors to connect a company’s story, for example steady cash flows backed by unique satellite assets or, conversely, intensifying competition and slowing growth, to a structured forecast that produces a fair value estimate you can compare directly with today’s share price to decide whether to buy, hold or sell. Because Narratives on the platform update dynamically when new information such as earnings releases, news or guidance arrives, you can see how different perspectives on Sirius XM, ranging from fair values near $50 per share to more cautious views closer to $24 per share, adjust in real time as the facts change.
Do you think there’s more to the story for Sirius XM Holdings? Head over to our Community to see what others are saying!
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.
Companies discussed in this article include SIRI.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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