NEW YORK - Sirius XM Holdings Inc. (NASDAQ: NASDAQ:SIRI), a prominent audio entertainment company in North America, has declared the start of a new era as an independent entity following the completion of its transaction with Liberty Media. The company announced an updated free cash flow forecast and confirmed the continuation of its quarterly dividend alongside a significant stock repurchase authorization.
The company restated its full-year 2024 revenue and adjusted EBITDA guidance, maintaining its total revenue estimate at approximately $8.75 billion and adjusted EBITDA at about $2.7 billion. However, SiriusXM updated its free cash flow guidance to around $1.0 billion, reflecting an estimated $200 million influence due to transaction-related costs and cash outflows associated with Liberty Sirius XM Holdings Inc. before the deal's closure.
SiriusXM's CEO, Jennifer Witz, expressed enthusiasm for the company's future, emphasizing a commitment to enhancing subscriber value, expanding advertising offerings, and driving organizational efficiency. CFO Thomas Barry highlighted the company’s priorities of investing in the business, reducing debt, and continuing capital returns.
Following the Liberty Media transaction, SiriusXM's Board authorized a $1.166 billion stock repurchase program, which is a continuation of the former company's repurchase initiative that began in December 2012. Repurchases will be conducted on the open market and through private transactions, potentially including accelerated stock repurchase transactions, and will be funded through cash on hand, future cash flow from operations, and borrowings.
The company also reiterated its long-term target leverage ratio of mid-to-low three times adjusted EBITDA, aiming to focus excess cash flows on debt reduction until this target is reached while remaining open to strategic investment and capital return opportunities.
In addition to these financial updates, SiriusXM is set to evaluate its goodwill and other intangible assets, particularly those from the Liberty Media transaction. This assessment may lead to a non-cash impairment charge, which would not impact the company's liquidity, cash flows from operating activities, or debt covenants.
The completion of the Liberty Media transaction has resulted in SiriusXM becoming an independent, publicly traded company with its common stock trading on Nasdaq under the ticker symbol "SIRI" starting today. The transaction led to a net reduction of about 12% of the company's outstanding shares before accounting for the 1 for 10 adjustment.
This news article is based on a press release statement from SiriusXM.
In other recent news, SiriusXM has entered a multi-year agreement with Alex Cooper, securing exclusive advertising and distribution rights for Cooper's podcast and the Unwell Network shows. This deal is set to expand SiriusXM's influence in the podcasting realm. In parallel developments, Liberty Media Corporation, SiriusXM's parent company, has made amendments to its bylaws and director nomination process while facing an antitrust investigation by the U.S. Department of Justice concerning Formula 1's actions.
SiriusXM has declared a quarterly cash dividend of $0.0266 per share, reflecting its consistent financial policies. Furthermore, SiriusXM is involved in a significant merger with Liberty Sirius XM Holdings Inc., with recent amendments reducing the total number of outstanding shares of New Sirius common stock by 90% post transactions.
Liberty Media Corporation has announced adjustments to the exchange ratios to align the nominal share price of New Sirius common stock with the shares being redeemed in the split-off. This move is expected to enhance the stock's appeal to investors. In response to these developments, Citi and Seaport Global Securities have downgraded Liberty SiriusXM's stock rating from Buy to Neutral, reflecting recent changes in Liberty SiriusXM's financial strategies.
InvestingPro Insights
As Sirius XM Holdings Inc. (NASDAQ: SIRI) embarks on its journey as an independent company post the Liberty Media transaction, its financial health and market valuation become focal points for investors. According to InvestingPro data, SiriusXM's market capitalization stands at approximately $7.28 billion, reflecting the scale of the business in the competitive audio entertainment market.
The company's Price/Earnings (P/E) ratio, a key indicator of investor expectations, is currently at 7.48, which is adjusted to 7.21 for the last twelve months as of Q2 2024. This P/E ratio suggests that the stock could be undervalued compared to the earnings it generates, which is echoed by one of the InvestingPro Tips indicating a strong free cash flow yield. This could be a positive sign for investors looking for value investment opportunities.
Another InvestingPro Tip points out that SiriusXM's short-term obligations exceed its liquid assets, which is an important consideration for investors when assessing the company's short-term financial stability. This could be a key factor in the company's focus on reducing debt and managing its capital structure efficiently.
InvestingPro also notes that analysts predict the company will be profitable this year, and it has been profitable over the last twelve months. This is consistent with the company's own financial guidance and CEO Jennifer Witz's optimistic outlook on the company's future. However, it's worth noting that SiriusXM does not pay a dividend to shareholders, which might influence the investment decisions of those seeking regular income from their holdings.
For investors interested in more detailed analysis and additional insights, there are more InvestingPro Tips available at https://www.investing.com/pro/SIRI, which could further inform investment decisions regarding SiriusXM.
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