Sirius XM (SIRI) Crashed 65%. Buffett’s Buying the Dip. Here’s Why I Am Too.
The market’s priced it like a melting ice cube. But the cash flow, buybacks, and Berkshire stake suggest something else entirely.
A Value Play Hiding in Plain Sight
Sirius XM has quietly become one of the most hated stocks on the market.
Over the past two years, SIRI collapsed from nearly $60 to just above $20. Subscriber growth flatlined. The media dismissed it as “radio in decline.” And most investors walked away without looking back.
But someone else walked in.
Berkshire Hathaway now owns more than 35% of the company.
They just added another 2.3 million shares this spring — a $54 million bet that the market is wrong.
The setup is classic Buffett:
A misunderstood business
Generating real cash
Returning it to shareholders
Trading at a deep discount
Today, SIRI trades at just 6–8× forward earnings and 7× free cash flow.
It’s buying back shares. It’s paying a 4.6% dividend. And it’s still embedded in 67% of new cars sold in America.
This is not a growth stock, but it is a cash cow — mispriced by a market that stopped caring.
Valuation and Cash Flow
SiriusXM isn’t trying to be the next Spotify or Netflix.
It doesn’t need to be.
The bull case starts — and mostly ends — with the numbers.
At ~$20/share, SiriusXM trades around 6–8× forward EPS and roughly 7× 2025 free cash flow.
That’s on $1.15 billion in expected FCF this year, rising from $1.0 billion in 2024. By 2027, they’re aiming for $1.5 billion.
This isn’t speculative. The cash is real. It’s recurring. And it’s being returned.
Buybacks: Over the past decade, Sirius has repurchased nearly half its float.
The current $1.17 billion authorization remains active.
Dividends: A $0.27 quarterly payout yields ~4.6% — well above the 10-year Treasury. The payout ratio? Below 40%.
Most media companies are burning cash. Sirius is printing it.
“Free cash flow conversion is expected to reach 44% of EBITDA in 2025.”
That’s margin expansion in a flat-revenue business.
It may not grow fast. But at these multiples, it doesn’t need to grow at all.
Stabilizing Subs: In-Car Is Sticky
This is where the bears get it wrong.
Yes, subscriber numbers have declined.
But under the surface, the trend is improving — and the in-car business is holding strong.
In Q1 2025:
Net self-pay subscriber losses were 303k, a 16% improvement YoY
Churn dropped to 1.6%, even after price increases
Most attrition came from one-time factors: click-to-cancel rules, trial timing, and plan hikes
In other words: the customer base isn’t crumbling. It’s adjusting.
And SiriusXM is adjusting too — by doubling down on the car.
90% of its subscribers use SiriusXM in-car.
That’s where the product is sticky.
Recent moves:
360L platform now live in Tesla and Rivian, expanding reach in EVs
Streaming access for 2M+ Teslas
Revamped used-car trial program to target secondary buyers
Meanwhile, new modular pricing is opening the funnel:
$9.99/month “music-only” in-car tier (launched Q1)
Ad-supported tier coming later this year, designed for price-sensitive users
This isn’t about expanding the TAM — it’s about defending ARPU and keeping churn low.
And the early results say: it’s working.
Cost Discipline and Capital Allocation
When revenue growth is scarce, discipline becomes the edge. SiriusXM knows it.
Over the last two years, they’ve cut $350 million in costs. Now they’re targeting another $200 million in savings by year-end 2025 — trimming low-ROI marketing, cutting non-core bets, and consolidating tech platforms.
This isn’t lip service. The margin impact is real.
Despite flat revenues, adjusted EBITDA is expected to hit ~$2.6B in 2025, only slightly below 2024 levels — because cost cuts are doing the heavy lifting.
Capital allocation remains tight:
$700M in debt is being paid down this year, dropping net leverage to ~3.6× EBITDA
Buybacks continue, with over $1.1B still authorized
The dividend is safe, fully covered by cash flow
Management isn’t chasing growth.
They’re optimizing a cash machine.
In a market obsessed with top-line stories, SiriusXM is quietly compounding on the bottom line. I like growth just as much as anyone, but these deep value plays have worked well for me over the years.
The Catalysts Wall Street Is Missing
SiriusXM isn’t priced like a company with upside.
But there are several levers in motion — and the market has largely stopped paying attention.
First, the long-awaited ad-supported tier is scheduled to launch in the second half of 2025. This opens the door to a large cohort of listeners who’ve historically balked at price — younger users, casual users, and those who already pay for other streaming services. It won’t move the revenue line overnight. But it could begin to reverse the narrative that SiriusXM is priced out of the mainstream.
Second, the Howard Stern contract is up for renegotiation. Stern accounts for a significant portion of paid listening hours, and his renewal (or replacement) will have real implications for retention and content spend. A favorable outcome here — even just stability — would reassure a market that still sees legacy content deals as ticking liabilities.
Then there’s the EV pipeline. Tesla and Rivian integrations are already live, and SiriusXM has been quietly expanding its OEM relationships. The company’s 360L platform makes in-car streaming seamless, even for electric vehicles that don’t include traditional satellite receivers. As EV penetration grows, so does Sirius’s footprint — especially through used-car resales, where SiriusXM continues to embed trial offers.
And finally, the short interest is worth noting. Roughly 10% of the float is sold short — one of the highest levels in a decade. That doesn’t guarantee anything. But it does mean that any positive surprise — a good quarter, a content deal, signs of subscriber stabilization — could force some fast reassessments.
In sum: SiriusXM isn’t dependent on a single breakthrough. But it has a half-dozen quiet catalysts that could stabilize the core business or nudge sentiment in the right direction.
Mispriced, Misunderstood, But Not Missing
This isn’t a high-growth media stock.
It’s a high-margin utility for commuters — and it’s trading like a melting ice cube.
That mismatch is the opportunity.
SiriusXM isn’t trying to reinvent itself. It’s returning capital, cutting costs, defending its in-car stronghold, and adapting its pricing to meet the moment. It doesn’t need subscriber growth to justify the current price — it just needs stability.
At ~7× free cash flow, with a 4.6% dividend and meaningful buybacks, the stock doesn’t need a hero narrative. It just needs to keep doing what it’s doing.
Berkshire’s stake — now over 35% — suggests that’s exactly the bet being made:
No reinvention. No moonshot. Just steady cash flow, patiently compounding, while the market looks the other way. As usual, I’m trading this by selling puts and using the premium to buy the underlying.
SiriusXM isn’t for everyone.
But for value-focused investors, the signal is a lot stronger than the noise.