Sirius XM Holdings Inc (NASDAQ: SIRI) is in focus this morning following news that Berkshire Hathaway Inc (NYSE: BRK.B) has significantly increased its stake in the radio satellite company in recent sessions.
As SIRI shares fell on disappointing earnings last Thursday, influential investor Warren Buffett’s conglomerate scooped up five million shares of the Englewood-headquartered firm – effectively raising its stake to roughly 37%.
Berkshire now owns $2.6 billion worth of Sirius XM stock, even though its latest earnings release highlighted continued weakness in advertising and revenue decline.
At the time of writing, the company’s share price is down over 20% versus its year-to-date high.
Why is Berkshire bullish on Sirius XM stock?
Berkshire Hathaway’s growing stake in Sirius XM shares reflects a bet on the company’s durable cash flow and entrenched subscriber base.
SIRI generates over three-quarters of its revenue from subscriptions, making it less vulnerable to cyclical ad spending. Its satellite radio model – installed in millions of vehicles – creates habitual listening patterns and high retention rates.
Despite near-term weakness, Buffett likely sees value in this model’s ability to generate predictable earnings in the long run.
Plus, the firm’s disciplined capital allocation, including share buybacks and dividends, makes it even more attractive to own.
While the media landscape is shifting, Sirius XM Holdings Inc.’s hybrid model of legacy radio and digital streaming offers a niche that’s hard to replicate.
For Berkshire, the only pure-play satellite radio company in the US is a classic value play with long-term upside.
Evercore ISI shares constructive view on SIRI shares
Warren Buffett’s confidence in Sirius XM’s fundamentals for the longer term is somewhat shared by Evercore ISI analysts in the second half of 2025.
In their latest research note, they said, “2025 continued to be a transition year, though we believe management continues to execute well, and we don’t see a meaningful shift in fundamentals.”
Evercore ISI maintained its “hold” rating on SIRI stock following quarterly results – quoting the company’s strong free cash flow (FCF) and cost-cutting initiatives as reasons to remain optimistic.
Sirius Holdings recorded $402 million in FCF, up 27% on a year-over-year basis for its fiscal Q2, and reiterated its commitment to $1.5 billion by 2027.
All in all, with a 5.0% dividend yield and a price-to-earnings (P/E) ratio of less than 8, Sirius XM stock sure is attractive – at least for the income-focused investors.
Sirius XM shares: value or value trap?
Sirius XM is a paradox – declining revenue, yet robust cash flow and shareholder returns.
Berkshire’s vote of confidence is significant, but not definitive. The company faces real challenges from streaming giants and shifting consumer habits.
For investors, SIRI stock offers a compelling valuation and income stream, but growth remains elusive.
If Sirius XM can stabilize its user base and revitalize its digital offerings, there may be upside.
Until then, it’s a cautious buy—best suited for those who prioritize cash flow over growth.
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