Sirius XM vs. Streaming Platforms: Does the Legacy Audio Player Still Belong in Portfolios?​

• Sirius XM is losing subscribers arsenic net streaming platforms proceed to grow.

• Value investors mightiness beryllium drawn to its ultra-cheap valuation and precocious dividend yield.

• 10 stocks we similar amended than Sirius XM ›

Sirius XM (NASDAQ: SIRI) has been connected a wildly disappointing tally for shareholders implicit the past 5 years: The banal has generated a full instrumentality of antagonistic 59%.

It has been a hard situation for the institution to navigate. Technological innovation and disruptive forces are impacting the business, and it faces stiff contention from immoderate almighty net companies.

Does Sirius XM banal inactive beryllium successful retail investors' portfolios?

Sirius XM has a ineligible monopoly since it's the lone outer vigor relation successful the U.S. And erstwhile compared to terrestrial vigor operators, it has nationwide coverage, amended selection, and wide quality.

But the days of Sirius XM ruling the audio amusement marketplace are agelong gone. Blame it connected the prevalence of wide and faster net connectivity, much susceptible smartphones, and intensifying contention from tech firms that privation to seizure adjacent much of consumers' attention.

When it comes to audio entertainment, investors should beryllium reasoning astir offerings from Spotify, Apple, and Alphabet. All of those services were built with mobile-first approaches, providing beardown and cost-effective idiosyncratic experiences that person proven appealing to listeners, particularly among younger audiences. Spotify unsocial has achieved an unthinkable level of adoption, with 713 cardinal monthly progressive users.

Apple and Alphabet, meanwhile, are successful advantageous positions that are eroding the in-car borderline that Sirius XM erstwhile enjoyed. These tech giants power the apical mobile operating systems, iOS and Android. And with Apple CarPlay and Android Auto, these 2 platforms link seamlessly with vehicles.

Despite each this, immoderate value investors mightiness inactive beryllium consenting to instrumentality a accidental connected Sirius XM stock. That's due to the fact that it trades astatine a inexpensive guardant price-to-earnings ratio of 6.9. And it pays a hefty dividend that yields astir 5.3% astatine the existent stock price.

Given the competitory scenery successful the audio space, though, it makes consciousness that Sirius XM's concern is declining. Revenue totaled implicit $2.1 cardinal successful the 3rd quarter, down little than 1% twelvemonth implicit year. Analysts judge that the company's gross volition beryllium level from 2025 done 2027.

Its top-line softness has been driven by a gradual diminution successful the fig of customers it serves. Sirius XM reported losing self-pay subscribers successful 8 of the past 11 quarters. It's evident this concern is connected the incorrect broadside of technological changes happening successful the industry.