Sirius XM Ends 2022 on Mixed Note; Soft 2023 Auto Sales Drive Weak Outlook

Sirius XM posted a mixed ending to 2022 as fourth-quarter revenue came in just below and EBITDA beat FactSet consensus. The SiriusXM service added 162,000 self-pay customers in the quarter, raising the 2022 total to a gain of 384,000. While the firm posted a strong second half, the year-end total is the lowest of the last decade and more than 45% below the lockdown-affected 2020. The firm provided weak guidance for 2023 with modestly negative SiriusXM net adds as management projects soft auto sales in both the new and used channels. We expect to slightly lower our $8.25 fair value estimate after rolling our model and incorporating the updated Morningstar projections for U.S. auto sales.