Why You Should Invest In Sirius XM Radio Inc. (NASDAQ:SIRI)?
Analysts at Pacific Crest initiated coverage on the shares of Sirius XM Radio Inc. (NASDAQ:SIRI)’s common stock with a ‘sector perform’ rating. The firm maintains 12 month fair value range of $3 to $3.8 on the company’s shares. However in research note, the analyst expressed concerns over increasing competition in the sector especially in the internet radio segment as the in-car connectivity increases rapidly among many of the leading automakers. The increasing competition could challenge the growth prospects of the company and prompt more negative view of market shares.
Among other analysts, Goldman Sachs Group Inc. (NYSE:GS) downgraded the shares of Sirius XM Radio Inc. (NASDAQ:SIRI) from a ‘buy’ rating to a ‘neutral’ and Evercore Partners Inc. (NYSE:EVR) downgraded from an ‘overweight’ to an ‘equal weight’ rating.
Besides the traditional music players like Pandora Media Inc. (NYSE:P), the competition thwarted by the entry of tech giants like Google Inc. (NASDAQ:GOOG) via Google Play and Apple Inc. (NASDAQ:AAPL) with its iTunes radio are building up constant pressures. The entry from these giants certainly signals traditional players to adopt aggressive strategies to defend their market shares and failing to which they may find it difficult even to sustain their existence. This is because both Google and Apple enjoy access to large user base through their Android and iOS platforms, which they can easily leverage to promote their streaming services.
The Sirius Advantage
Sirius XM Radio Inc. (NASDAQ:SIRI) enjoys better coverage (reception) of its services backed by the satellites the radio service provider has and that too at much affordable cost to the consumer (about $10 a month). Moreover its satellite radio services offer commercial free and exclusive radio channels. Considering these, even though Pandora, Google and Apple offer free radio, the subscription charges of a Sirius XM Radio Inc. (NASDAQ:SIRI) are comparatively lesser for the enthusiastic listener than paying hefty data charges.