Sirius XM: Falling Leverage Unlocks Share Buybacks

Curonian Research 1.25K Followers Follow Summary Sirius XM remains resilient despite a post-earnings share price drop, with dependable cash flow and industry-low churn. SIRI trades at a compelling 13-14% free cash flow yield, with buybacks set to begin as leverage hits the 3.4x target. Q2 FY2026 saw 1% revenue growth, 3% adjusted EBITDA growth, 48% free cash flow increase, and record-low 1.4% churn. Podcasting and advertising revenues are growing rapidly, offsetting flat subscriber revenue, while cost controls and moderating capex drive improved financials. GDMatt66/iStock Editorial via Getty Images The share price of SiriusXM ( SIRI ) fell by as much as 8% intraday following the release of its Q2 FY2026 results, suggesting that the market was clearly disappointed. Despite some cautious commentary regarding the This article was written by Curonian Research 1.25K Followers Follow - Value investor with 15 years of professional experience in security analysis and portfolio management. Learned the trade in one of the best-regarded value investing houses in the United Kingdom. Holds a First Class BSc Economics degree from the University of London and a CFA Level II. - My investment philosophy recognises that both valuation and superior commercial prospects are critical drivers of long-term stock returns. I take an unconstrained, long-term view, as many attractive opportunities are mispriced by behavioural biases, short-term investor time horizons, and incomplete fundamental analysis. - Markets can become dislocated in the short term, but over time share prices tend to reflect the strength of underlying business fundamentals. My approach is based on rigorous bottom-up research, with a focus on predictable, cash-generative businesses that possess durable competitive advantages, attractive reinvestment opportunities, and sensible valuations.- The objective is to identify underfollowed companies capable of compounding intrinsic value at attractive rates over many years, while maintaining a disciplined focus on downside risk and capital preservation. Analyst’s Disclosure: I/we have a beneficial long position in the shares of SIRI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.