SiriusXM: Deutsche Bank Sees Significant Upside From Digital Audio
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The company also expanded its partnership with Amazon, potentially creating another avenue for growth in digital audio. Deutsche Bank believes these developments could lead to upward earnings revisions and a higher valuation multiple. The main uncertainty is Berkshire Hathaway's growing ownership stake. Berkshire already owns about 37% of SiriusXM's outstanding shares, meaning continued buybacks could push its ownership toward 50%. That creates questions about how SiriusXM will balance buybacks, dividends, and Berkshire's ownership position. This is particularly important if the company's operating performance improves at the same time. Revenue and EBITDA growth combined with a lower share count can produce stronger per-share earnings growth than the underlying business growth alone. Berkshire Hathaway's large stake can also be viewed positively. Its ownership represents a significant shareholder commitment and could help support capital allocation decisions that benefit long-term shareholders. Deutsche Bank also believes Berkshire's increasing ownership should not undermine the investment case at this point. The biggest risk is that investors may price Sirius XM Holdings Inc. (NASDAQ:SIRI) for the $2 billion revenue opportunity before the company actually delivers it. Deutsche Bank's estimate is based on what the YouTube relationship could become by 2029. There is no guarantee that SiriusXM will reach that level of revenue or achieve the projected high-teens EBITDA margin. According to the CNBC report, eight of 16 analysts covering Sirius XM Holdings Inc. (NASDAQ:SIRI) have a Hold rating, while only four have Buy or Strong Buy ratings. That suggests investors will likely demand evidence that the new strategy is translating into actual revenue and earnings growth before broadly rerating the stock. If results fail to validate the bullish estimates, the stock could remain at a discounted valuation despite the new partnerships. While we acknowledge the potential of SIRI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock . READ NEXT: Brown-Forman (BF-B) Struggles with Weak Spirits Demand and Canada Headwinds and PG&E (PCG)'s $2 Billion Spending Deferral Raises Questions Over its Growth Outlook Disclosure: None. This article is originally published at Insider Monkey .
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