By Relmor Demitrius -
A few months ago, after Q3 results, I wrote a few articles making some predictions. Sirius XM had finally broke even before adjustments, and raked in operating income for the year now totaling over 350 million in positive operating income, and 35 Million in free cash flow. With their historically best quarter ahead, Q4, and an early press release from Sirius XM (Nasdaq:SIRI) in January confirming over 65 million in free cash flow for Q4, laying the groundwork that the quarter should be a great one for the bottom line. Will Sirius XM finally report their first ever profits, AFTER adjustments are made, seems to be the question of the month. Although its too close to call, pre adjusted profits are guaranteed. With interest payments and some charges being removed from the positive operating income, a strong case can still be made for profitability in Q4, and proof of the business model can be factually confirmed, as profits finally are reaching the common stock. With a strong close on the stock price Friday of over 88 cents, and expected good news ahead, investors are finally seeing the light at the end of the tunnel.
I predicted after Q3 we would get a S&P credit upgrade based on Q4 results. Well they did indeed get a corporate credit upgrade taking them from B- to B, based simply on their Q3 results and a press release announcing some pre earnings information. Apparently S&P had seen enough. They also kept their outlook on positive, which means another upgrade can be EXPECTED within 6 months to 2 years. Although keep in mind, this upgrade only took around 5 month, so its not an exact science.
I predicted this stock would receive upgrades and analysts would up their price targets. This has occurred as well. Sirius XM has received numerous price upgrades since then, and more than a few buy rating, some initiation of coverage with a buy rating, and some moving Sirius XM from Hold to a Buy rating.
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