This Week in Sirius XM Radio

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Things never get dull for the country's lone satellite-radio provider.

Shares of Sirius XM Radio moved lower in the week, shedding 0.5% of their value to close at $3.82. The media darling's slide wasn't as bad as the Nasdaq's 0.8% decline on the week, however. After closing at a five-year high of $3.84 a week earlier, traders revisited that mark a couple of times during the week but failed to top it.

There was more going on beyond the share-price gyrations, though. Sirius XM also got a price target upgrade from Citigroup, Pandora posted its metrics for July, and Rdio launched a Pandora-like discovery platform.

Let's take a closer look.

Citi bull
Citi analyst Jason Bazinet pushed his price target on Sirius XM to $4.50 earlier this month, joining several other analysts now perched at $4 or higher. However, Bazinet's ambitious outlook has the media giant buying back $11 billion in stock through the end of 2015. That would be nearly half of Sirius XM's shares outstanding if the stock price hovers where it's at now.

Of course, Sirius XM could buy more than half of its shares if the stock tanks, but that doesn't seem likely. You would expect the shorts to cover and for there to be limited downside if the market knew Sirius XM was perpetually snapping up stock. Still, Bazinet thinks free cash flow and some new debt could make that lofty repurchase goal happen.

Panned aura
The leading Internet radio provider offers up monthly metrics, giving investors a great snapshot into the digital market that Sirius XM is trying to be a bigger part of these days.

Pandora served up 1.28 billion hours of content, 14% ahead of last year. But year-over-year growth has been decelerating. Growth was 17% last month, and 22% back in May. It should also bear pointing out that listener hours were greater in May than they were in July. Yes, there's some seasonality here, but the stats were the other way around last year, with July outpacing May.

Pandora's share of the U.S. radio listening market last month improved to 7.08% from 7.04% in June, but it's still below the 7.29% mark it registered in May.

Active listeners, checked in at 71.2 million, 30% more than a year earlier. Combined with the smaller growth in listener house, the takeaway here is that the average user is streaming less. Pandora introduced some streaming restrictions earlier this year to get heavy users to become premium members, and that probably led to some of the sequential softness.

Rdio opens Pandora's box
Cult fave streaming app Rdio beefed up its offerings by introducing a personalized radio feature. Rdio isn't the first premium platform to enhance its service by taking a page out of the Pandora playbook. Spotify also rolled out a similar Pandora-ish option a few months ago -- and yes, even Sirius XM hopped on this trend with its MySXM feature for its digital subscribers.

All of the refreshed competition may explain why Pandora's growth has been decelerating in recent months.

A Sirius future
It was an interesting week for Sirius XM. The new week isn't likely to be dull.

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Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Pandora Media. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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