One firm that I have been interested in a while is Sirius XM Holdings (SIRI). Even though this is the case, there's a difference between liking something and seeing value in it. You see, I do fear that upside potential for the firm might be limited for a couple of reasons. In what follows, I will dig into the data provided by management and give my thoughts on how investors might want to approach Sirius moving forward.
Subscription growth is slowing
Most companies, at some point in time, went through a phase where they were "growth" entities. Growth investors seek opportunities where upward momentum in the form of sales and/or profits can justify a high share price today so long as said momentum is enough to propel the firm to an attractive position, adjusted for price, in the long run. At that stage, firms make a transition into a mature company and, depending on different conditions, may become a value firm at some point in time.