As 2013 begins, now's a good time to look at the future prospects for the stocks you own. If you don't know where a company's headed in the next year and beyond, then it's impossible to make an informed decision about whether you should add the stock to your portfolio -- or sell it if you already own it.
Today, I'll look at Sirius XM Radio . The satellite-radio giant put up amazingly strong numbers in 2012 as it continued to pull in customers despite threats from streaming audio and other competitors. Can Sirius keep climbing in the year ahead? Read on for more about Sirius XM Radio's prospects for 2013.
Stats on Sirius XM Radio
Average Stock Target Price
Full-Year 2012 EPS Estimate
Full-Year 2013 EPS Estimate
Full-Year 2012 Sales Growth Estimate
Full-Year 2013 Sales Growth Estimate
Source: Yahoo1 Finance.
*Includes one-time income-tax benefit.
Will Sirius XM stay connected in 2013?
Analysts aren't sure what to expect from Sirius XM this year. Although they expect continued revenue and earnings growth after adjusting for last year's income-tax benefit from recognizing more than $3 billion of net operating loss offsets, analysts don't think the stock has much upside, with a target price just 3% higher than the current share price.
Arguably the biggest question facing Sirius is whether it can keep growing its subscriber base at the same pace it did last year. A few days ago, the company released figures saying that it ended 2012 with 2 million net subscriber additions, well above the 1.3 million it projected last year. For 2013, the company expects 1.4 million added subscribers, with similarly conservative estimates for revenue, earnings, and free cash flow. Investors will want to see better numbers than that to keep the stock moving higher.
The other big uncertainty comes from Liberty Media's stake in Sirius. With the media giant getting permission to take a majority stake in Sirius, Liberty Media is expected to spin off its Sirius stock to Liberty shareholders.
Meanwhile, Sirius is doing its best to stay in front of the trend toward streaming multimedia. So far, moves from Ford and Toyota to offer audio entertainment options from Pandora , iHeartRadio, and other providers haven't dented Sirius subscriber counts, especially because carmakers are also providing factory-installed Sirius XM receivers on new models. It's in Ford's and Toyota's interest not to play favorites but rather to give all their customers everything they want, and Sirius continues to play a big part in those customer wishes.
With such strong share gains in 2012, expecting a big jump in 2013 may be too greedy. But Sirius XM's business prospects look bright for this year and beyond.
Will Sirius XM stay on top?
Sirius has been through tough times over the years, but it has picked itself up off the floor since its 2009 lows. Finding disruptive companies is a specialty of Motley Fool co-founder David Gardner, who has had substantial success in finding revolutionary stocks before Wall Street does. Learn more about how David discovers his winners; click here to get instant access to a personal tour of David's Supernova service.
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The article Will Sirius XM Radio Keep Soaring in 2013? originally appeared on Fool.com.
Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends and owns shares of Ford. 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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