Recovery in Auto Inventories Should Drive Demand for SiriusXM; Raising FVE to $8.25

While Sirius XM is no longer just a satellite radio service--following the 2019 purchase of Pandora--the legacy service remains the firm's crown jewel, generating three fourths of the revenue and 85% of gross profits. Due in part to the tight auto supply in the second half of 2021, which is expected to persist through the first half of this year, SiriusXM is projected to have one of its worst years in terms of net customer growth. While the market has punished the stock, we believe that the service is poised to return to growth in 2023 and beyond.