Analyst Note| Neil Macker, CFA |
Sirius XM posted another strong quarter, as revenue and EBITDA exceeded FactSet consensus expectations for the second quarter. The company added 355,000 self-pay SiriusXM customers in the quarter, taking the total over the last 12 months to an impressive 1,057,000 despite the impact of the pandemic on commuting and travel. The strong self-pay conversion along with the continued improvement in churn to a record low of 1.5% reinforces our belief that SiriusXM is holding its own versus its streaming competitors, which are gaining more traction in and out of cars. Management increased its 2021 guidance with satellite radio net adds to hit 1.1 million versus 800,000 previously. We are maintaining our narrow moat rating and plan to modestly raise our $7 fair value estimate to account for the improved guidance.