Why Sirius XM Is Poised to Pull Back

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, satellite radio services specialist Sirius XM Radio has received a distressing two-star ranking.

With that in mind, let's take a closer look at Sirius, and see what CAPS investors are saying about the stock right now.

Sirius facts

  

Headquarters (founded)

New York (1990)

Market Cap

$20.3 billion

Industry

Cable and satellite

Trailing-12-Month Revenue

$3.4 billion

Management

CEO James Meyer (since 2012)

Chief Content Officer Scott Greenstein (since 2004)

Return on Equity (average, past 3 years)

10.8%

Cash/Debt

$521.0 million / $2.4 billion

Competitors

Apple 

CBS

Pandora Media 


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 28% of the 786 All-Star members who have rated Sirius believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, Gibybo, touched on Sirius' seemingly lofty valuation:

Earnings are roughly $400M (after adjusting for the $3B income tax adjustment a few quarters ago), so [$20B market cap] is a pretty high multiple of that. That would imply some pretty aggressive growth prospects, but I'm not sure what that would be. Satellite radio is not likely to be a growth industry over the next 10 years, and their other markets are pretty small.

Of course, despite Sirius XM being one of the market's biggest winners since bottoming out three years ago, there might still be some healthy upside if things go right for it -- and plenty of room for it to fall if things don't. Read all about Sirius in The Motley Fool's brand new premium report. To get started, just click here now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

The article Why Sirius XM Is Poised to Pull Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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