SiriusXM's stock could rebound with subscriber growth

SiriusXM has seen a significant drop in its stock value, declining almost 60% in 2024 while the S&P 500 rose over 20%. Although the stock is up 5% in 2025 due to an increase in investment from Warren Buffett's Berkshire Hathaway, it has dropped 11% since its peak in February. There are reasons for SiriusXM's struggles. The company has not seen any substantial revenue growth since 2021, and its subscriber base peaked in 2019. Revenue is expected to slightly decline in 2025. Additionally, popular host Howard Stern's contract ends that year, raising uncertainty about whether he will continue with the company. Despite these challenges, there are positives. SiriusXM remains a profitable business with high-margin subscription revenue. The company is cutting costs and improving cash flow. It has focused on exclusive content, signing deals for popular podcasts and expanding channels like Lady Gaga's GAGA RADIO. It has also extended partnerships with sports leagues. To regain its subscriber base, SiriusXM has introduced a free ad-supported service for new vehicles and a new three-year subscription option. The management believes there’s potential to gain 10 million new subscribers, which would be a record for the company. They also project a 30% increase in free cash flow by 2027. Currently, SiriusXM trades at less than eight times expected earnings and offers a 4.5% dividend yield. If management can successfully implement its turnaround strategy, the stock could be a great investment for patient investors.