SIRIUS XM Teams with Asbury (revised) - Analyst Blog
March 22 2012 - 9:18AM
Zacks
SIRIUS XM Radio Inc. (SIRI) recently announced
a strategic partnership with Asbury Automotive
Group (ABG) in order to provide radio service to the
latter’s pre-owned vehicles.
One of the leading automobile retailer and service provider in the
US, Asbury currently has 79 dealers operating in the U.S. Over
4,000 dealerships will participate in this program overall,
according to a press release. Thus, we believe that the partnership
with Asbury will provide SIRIUS XM the leading edge to expand their
market share.
In the last quarter of fiscal 2011, SIRIUS XM added nearly 540,000
customers, which in itself is a record since 2008. So we continue
to believe that such strategic partnerships with different car
manufacturers and dealers coupled with improving U.S. economic
conditions will further increase the company’s subscriber base
going forward.
In December, 2011, SIRIUS XM launched the advanced version SIRIUS
XM 2.0 called “Lynx.” Lynx is touted as the next-generation
satellite receiver that allows the subscribers to stream content to
home audio systems via Bluetooth. It also features high-resolution
touch screen support and allows 200 hours of music storage, hence
providing more options to the users to access their favorite music
anytime and from anywhere. Such an innovative product launch will
certainly act as catalyst for growth for the company going
forward.
Despite higher programming cost and stiff competition from Pioneer
System and other media players like Cumulus Media
Inc. (CMLS), we believe that the company will perform well
mainly based on increased programming line ups and improved
ratings.
We maintain our long-term Outperform recommendation for SIRIUS XM.
Currently, the company has a Zacks #3 Rank, implying a short-term
Hold rating.
Based in New York, SIRIUS XM provides satellite radio services in
the U.S. and Canada.
(We are reissuing this article to correct a couple mistakes.
The original article, issued March 13, 2012, should no longer be
relied upon.)
ASBURY AUTO GRP (ABG): Free Stock Analysis Report
CUMULUS MEDIA (CMLS): Free Stock Analysis Report
SIRIUS XM RADIO (SIRI): Free Stock Analysis Report
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