SiriusXM Posts Strongest Net Add Quarter Ever; Auto Supply Chain Issues May Put a Brake on Momentum

Sirius XM reported a strong third quarter as revenue and EBITDA exceeded FactSet consensus expectations. The SiriusXM service added 616,000 self-pay customers in the quarter, the highest in the firm’s history. The remarkable quarter took the total over the past 12 months to a very impressive 1,504,000 despite the ongoing impact of the pandemic on commuting and travel. Despite the strong quarter, the SiriusXM net adds guidance was only increased to over 1.1 million versus 1.1 million previously. The modest guidance increase is driven by the large drop in paid promo subscribers due to the constrained auto supply chain in the U.S. We are maintaining our narrow moat and our $7.50 fair value estimate. We think the current share price offers an attractive entry point for new investors.