Intrinsic value of Sirius XM Holdings - SIRI

Previous Close

$6.97

  Intrinsic Value

$1.18

stock screener

  Rating & Target

str. sell

-83%

Previous close

$6.97

 
Intrinsic value

$1.18

 
Up/down potential

-83%

 
Rating

str. sell

We calculate the intrinsic value of SIRI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 32.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.10
  7.79
  7.51
  7.26
  7.03
  6.83
  6.65
  6.48
  6.33
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.57
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
  5.27
  5.25
  5.22
  5.20
  5.18
  5.16
  5.15
Revenue, $m
  5,864
  6,321
  6,796
  7,289
  7,802
  8,335
  8,889
  9,465
  10,065
  10,689
  11,339
  12,016
  12,722
  13,459
  14,227
  15,029
  15,867
  16,743
  17,658
  18,614
  19,615
  20,663
  21,759
  22,907
  24,108
  25,368
  26,687
  28,069
  29,518
  31,037
Variable operating expenses, $m
  2,823
  3,005
  3,195
  3,392
  3,597
  3,810
  4,031
  4,261
  4,500
  4,750
  4,528
  4,799
  5,081
  5,375
  5,682
  6,002
  6,337
  6,686
  7,052
  7,434
  7,833
  8,252
  8,689
  9,148
  9,628
  10,131
  10,657
  11,210
  11,788
  12,395
Fixed operating expenses, $m
  1,186
  1,212
  1,238
  1,265
  1,293
  1,322
  1,351
  1,381
  1,411
  1,442
  1,474
  1,506
  1,539
  1,573
  1,608
  1,643
  1,679
  1,716
  1,754
  1,793
  1,832
  1,872
  1,914
  1,956
  1,999
  2,043
  2,088
  2,133
  2,180
  2,228
Total operating expenses, $m
  4,009
  4,217
  4,433
  4,657
  4,890
  5,132
  5,382
  5,642
  5,911
  6,192
  6,002
  6,305
  6,620
  6,948
  7,290
  7,645
  8,016
  8,402
  8,806
  9,227
  9,665
  10,124
  10,603
  11,104
  11,627
  12,174
  12,745
  13,343
  13,968
  14,623
Operating income, $m
  1,856
  2,104
  2,363
  2,632
  2,912
  3,204
  3,507
  3,824
  4,154
  4,497
  5,337
  5,711
  6,102
  6,511
  6,938
  7,384
  7,851
  8,340
  8,852
  9,388
  9,950
  10,539
  11,156
  11,803
  12,482
  13,194
  13,942
  14,726
  15,550
  16,414
EBITDA, $m
  3,008
  3,309
  3,622
  3,948
  4,286
  4,639
  5,006
  5,389
  5,787
  6,202
  6,635
  7,087
  7,559
  8,052
  8,567
  9,105
  9,668
  10,257
  10,874
  11,519
  12,196
  12,904
  13,647
  14,426
  15,242
  16,099
  16,997
  17,940
  18,929
  19,968
Interest expense (income), $m
  0
  371
  275
  310
  346
  383
  422
  463
  505
  549
  594
  642
  691
  743
  796
  852
  911
  972
  1,036
  1,102
  1,172
  1,244
  1,321
  1,400
  1,484
  1,571
  1,662
  1,758
  1,858
  1,963
  2,074
Earnings before tax, $m
  1,485
  1,829
  2,053
  2,286
  2,529
  2,781
  3,045
  3,319
  3,605
  3,903
  4,695
  5,020
  5,360
  5,714
  6,085
  6,473
  6,879
  7,305
  7,750
  8,216
  8,705
  9,218
  9,756
  10,320
  10,911
  11,532
  12,184
  12,868
  13,586
  14,340
Tax expense, $m
  401
  494
  554
  617
  683
  751
  822
  896
  973
  1,054
  1,268
  1,355
  1,447
  1,543
  1,643
  1,748
  1,857
  1,972
  2,092
  2,218
  2,350
  2,489
  2,634
  2,786
  2,946
  3,114
  3,290
  3,474
  3,668
  3,872
Net income, $m
  1,084
  1,335
  1,499
  1,669
  1,846
  2,030
  2,223
  2,423
  2,632
  2,849
  3,427
  3,665
  3,912
  4,171
  4,442
  4,725
  5,022
  5,332
  5,657
  5,998
  6,355
  6,729
  7,122
  7,533
  7,965
  8,418
  8,894
  9,394
  9,918
  10,468

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  9,008
  9,710
  10,439
  11,197
  11,985
  12,804
  13,655
  14,540
  15,461
  16,420
  17,418
  18,458
  19,543
  20,674
  21,854
  23,087
  24,374
  25,718
  27,124
  28,594
  30,131
  31,740
  33,424
  35,187
  37,033
  38,967
  40,993
  43,117
  45,343
  47,676
Adjusted assets (=assets-cash), $m
  9,008
  9,710
  10,439
  11,197
  11,985
  12,804
  13,655
  14,540
  15,461
  16,420
  17,418
  18,458
  19,543
  20,674
  21,854
  23,087
  24,374
  25,718
  27,124
  28,594
  30,131
  31,740
  33,424
  35,187
  37,033
  38,967
  40,993
  43,117
  45,343
  47,676
Revenue / Adjusted assets
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
  0.651
Average production assets, $m
  6,715
  7,238
  7,781
  8,346
  8,933
  9,544
  10,178
  10,838
  11,524
  12,239
  12,983
  13,759
  14,567
  15,410
  16,290
  17,209
  18,168
  19,170
  20,218
  21,314
  22,460
  23,659
  24,914
  26,228
  27,604
  29,046
  30,556
  32,139
  33,798
  35,538
Working capital, $m
  -839
  -904
  -972
  -1,042
  -1,116
  -1,192
  -1,271
  -1,354
  -1,439
  -1,529
  -1,621
  -1,718
  -1,819
  -1,925
  -2,034
  -2,149
  -2,269
  -2,394
  -2,525
  -2,662
  -2,805
  -2,955
  -3,112
  -3,276
  -3,448
  -3,628
  -3,816
  -4,014
  -4,221
  -4,438
Total debt, $m
  5,000
  5,632
  6,288
  6,971
  7,679
  8,416
  9,182
  9,979
  10,808
  11,671
  12,569
  13,506
  14,482
  15,500
  16,562
  17,671
  18,829
  20,039
  21,304
  22,627
  24,011
  25,459
  26,974
  28,561
  30,223
  31,963
  33,787
  35,698
  37,702
  39,802
Total liabilities, $m
  8,108
  8,739
  9,395
  10,078
  10,786
  11,523
  12,289
  13,086
  13,915
  14,778
  15,676
  16,613
  17,589
  18,607
  19,669
  20,778
  21,936
  23,146
  24,411
  25,734
  27,118
  28,566
  30,081
  31,668
  33,330
  35,070
  36,894
  38,805
  40,809
  42,909
Total equity, $m
  901
  971
  1,044
  1,120
  1,198
  1,280
  1,365
  1,454
  1,546
  1,642
  1,742
  1,846
  1,954
  2,067
  2,185
  2,309
  2,437
  2,572
  2,712
  2,859
  3,013
  3,174
  3,342
  3,519
  3,703
  3,897
  4,099
  4,312
  4,534
  4,768
Total liabilities and equity, $m
  9,009
  9,710
  10,439
  11,198
  11,984
  12,803
  13,654
  14,540
  15,461
  16,420
  17,418
  18,459
  19,543
  20,674
  21,854
  23,087
  24,373
  25,718
  27,123
  28,593
  30,131
  31,740
  33,423
  35,187
  37,033
  38,967
  40,993
  43,117
  45,343
  47,677
Debt-to-equity ratio
  5.550
  5.800
  6.020
  6.230
  6.410
  6.570
  6.720
  6.860
  6.990
  7.110
  7.220
  7.320
  7.410
  7.500
  7.580
  7.650
  7.730
  7.790
  7.850
  7.910
  7.970
  8.020
  8.070
  8.120
  8.160
  8.200
  8.240
  8.280
  8.310
  8.350
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,084
  1,335
  1,499
  1,669
  1,846
  2,030
  2,223
  2,423
  2,632
  2,849
  3,427
  3,665
  3,912
  4,171
  4,442
  4,725
  5,022
  5,332
  5,657
  5,998
  6,355
  6,729
  7,122
  7,533
  7,965
  8,418
  8,894
  9,394
  9,918
  10,468
Depreciation, amort., depletion, $m
  1,152
  1,205
  1,259
  1,316
  1,374
  1,435
  1,499
  1,565
  1,633
  1,705
  1,298
  1,376
  1,457
  1,541
  1,629
  1,721
  1,817
  1,917
  2,022
  2,131
  2,246
  2,366
  2,491
  2,623
  2,760
  2,905
  3,056
  3,214
  3,380
  3,554
Funds from operations, $m
  2,236
  2,540
  2,758
  2,984
  3,220
  3,466
  3,721
  3,987
  4,265
  4,554
  4,726
  5,041
  5,369
  5,712
  6,071
  6,446
  6,839
  7,249
  7,679
  8,129
  8,601
  9,095
  9,613
  10,156
  10,726
  11,323
  11,950
  12,607
  13,298
  14,022
Change in working capital, $m
  -63
  -65
  -68
  -71
  -73
  -76
  -79
  -82
  -86
  -89
  -93
  -97
  -101
  -105
  -110
  -115
  -120
  -125
  -131
  -137
  -143
  -150
  -157
  -164
  -172
  -180
  -189
  -198
  -207
  -217
Cash from operations, $m
  2,299
  2,605
  2,826
  3,055
  3,294
  3,542
  3,800
  4,070
  4,351
  4,643
  4,819
  5,137
  5,470
  5,818
  6,181
  6,561
  6,959
  7,374
  7,810
  8,266
  8,744
  9,245
  9,770
  10,320
  10,897
  11,503
  12,138
  12,805
  13,505
  14,239
Maintenance CAPEX, $m
  -621
  -671
  -724
  -778
  -835
  -893
  -954
  -1,018
  -1,084
  -1,152
  -1,224
  -1,298
  -1,376
  -1,457
  -1,541
  -1,629
  -1,721
  -1,817
  -1,917
  -2,022
  -2,131
  -2,246
  -2,366
  -2,491
  -2,623
  -2,760
  -2,905
  -3,056
  -3,214
  -3,380
New CAPEX, $m
  -504
  -523
  -544
  -565
  -587
  -610
  -634
  -660
  -687
  -715
  -744
  -775
  -808
  -843
  -880
  -918
  -959
  -1,002
  -1,048
  -1,096
  -1,146
  -1,199
  -1,255
  -1,314
  -1,376
  -1,442
  -1,510
  -1,583
  -1,659
  -1,739
Cash from investing activities, $m
  -1,125
  -1,194
  -1,268
  -1,343
  -1,422
  -1,503
  -1,588
  -1,678
  -1,771
  -1,867
  -1,968
  -2,073
  -2,184
  -2,300
  -2,421
  -2,547
  -2,680
  -2,819
  -2,965
  -3,118
  -3,277
  -3,445
  -3,621
  -3,805
  -3,999
  -4,202
  -4,415
  -4,639
  -4,873
  -5,119
Free cash flow, $m
  1,174
  1,411
  1,558
  1,712
  1,872
  2,038
  2,212
  2,392
  2,580
  2,776
  2,851
  3,064
  3,286
  3,518
  3,760
  4,014
  4,278
  4,555
  4,845
  5,149
  5,467
  5,800
  6,149
  6,515
  6,898
  7,301
  7,723
  8,167
  8,632
  9,120
Issuance/(repayment) of debt, $m
  -1,746
  632
  656
  682
  709
  737
  766
  797
  829
  863
  899
  936
  976
  1,018
  1,062
  1,109
  1,158
  1,210
  1,265
  1,323
  1,384
  1,448
  1,515
  1,587
  1,662
  1,741
  1,824
  1,911
  2,003
  2,100
Issuance/(repurchase) of shares, $m
  1,341
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -405
  632
  656
  682
  709
  737
  766
  797
  829
  863
  899
  936
  976
  1,018
  1,062
  1,109
  1,158
  1,210
  1,265
  1,323
  1,384
  1,448
  1,515
  1,587
  1,662
  1,741
  1,824
  1,911
  2,003
  2,100
Total cash flow (excl. dividends), $m
  769
  2,042
  2,215
  2,394
  2,581
  2,775
  2,978
  3,189
  3,409
  3,639
  3,749
  4,000
  4,262
  4,536
  4,823
  5,123
  5,437
  5,766
  6,110
  6,472
  6,850
  7,248
  7,664
  8,101
  8,560
  9,042
  9,547
  10,078
  10,635
  11,220
Retained Cash Flow (-), $m
  -2,425
  -70
  -73
  -76
  -79
  -82
  -85
  -89
  -92
  -96
  -100
  -104
  -108
  -113
  -118
  -123
  -129
  -134
  -141
  -147
  -154
  -161
  -168
  -176
  -185
  -193
  -203
  -212
  -223
  -233
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  125
  135
  145
  156
  168
  179
  192
  204
  218
  231
  246
  261
  276
  293
  310
  327
  346
  365
  385
  406
  428
  451
  475
  500
  527
  554
  583
  614
  646
  679
Cash available for distribution, $m
  -1,656
  1,972
  2,142
  2,318
  2,502
  2,693
  2,893
  3,100
  3,317
  3,543
  3,649
  3,896
  4,154
  4,423
  4,705
  4,999
  5,308
  5,631
  5,970
  6,325
  6,697
  7,087
  7,496
  7,925
  8,375
  8,848
  9,344
  9,865
  10,413
  10,987
Discount rate, %
  11.90
  12.50
  13.12
  13.78
  14.46
  15.19
  15.95
  16.74
  17.58
  18.46
  19.38
  20.35
  21.37
  22.44
  23.56
  24.74
  25.98
  27.28
  28.64
  30.07
  31.57
  33.15
  34.81
  36.55
  38.38
  40.30
  42.31
  44.43
  46.65
  48.98
PV of cash for distribution, $m
  -1,480
  1,558
  1,480
  1,383
  1,273
  1,153
  1,027
  899
  772
  651
  520
  422
  335
  260
  197
  145
  105
  73
  50
  33
  21
  13
  8
  4
  2
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Sirius XM Holdings Inc. provides satellite radio services in the United States. The company broadcasts music plus sports, entertainment, comedy, talk, news, traffic, and weather programs, including various music genres ranging from rock, pop and hip-hop to country, dance, jazz, Latin, and classical; live play-by-play sports from principal leagues and colleges; multitude of talk and entertainment channels for various audiences; national, international, and financial news; and limited run channels. It also streams music and non-music channels over the Internet; and offer applications to allow consumers to access its Internet radio service on smartphones, tablets, computers, home devices, and other consumer electronic equipment. In addition, the company distributes satellite radios through the sale and lease of new vehicles; and acquires subscribers through the sale and lease of previously owned vehicles with factory-installed satellite radios. Its satellite radio systems include satellites, terrestrial repeaters, and other satellite facilities; studios; and radios. Further, the company provides satellite television services, which offer music channels on the DISH NETWORK satellite television service as a programming package; Travel Link, a suite of data services that include graphical weather, fuel prices, sports schedule and scores, and movie listings; real-time traffic services; and real-time weather services. Additionally, it offers location-based services through two-way wireless connectivity, including safety, security, convenience, maintenance and data services, remote vehicles diagnostics, and stolen or parked vehicle locator services. The company also sells satellite radios directly to consumers through its Website, as well as through national and regional retailers. The company was founded in 1990 and is headquartered in New York, New York. Sirius XM Holdings Inc. is a subsidiary of Liberty Media Corporation.

FINANCIAL RATIOS  of  Sirius XM Holdings (SIRI)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

SIRI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SIRI stock intrinsic value calculation we used $5425 million for the last fiscal year's total revenue generated by Sirius XM Holdings. The default revenue input number comes from 2017 income statement of Sirius XM Holdings. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our SIRI stock valuation model: a) initial revenue growth rate of 8.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 11.9%, whose default value for SIRI is calculated based on our internal credit rating of Sirius XM Holdings, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Sirius XM Holdings.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of SIRI stock the variable cost ratio is equal to 48.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1160 million in the base year in the intrinsic value calculation for SIRI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.5% for Sirius XM Holdings.

Corporate tax rate of 27% is the nominal tax rate for Sirius XM Holdings. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the SIRI stock is equal to 2.3%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for SIRI are equal to 114.5%.

Life of production assets of 10 years is the average useful life of capital assets used in Sirius XM Holdings operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for SIRI is equal to -14.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $-1524 million for Sirius XM Holdings - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 4638 million for Sirius XM Holdings is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Sirius XM Holdings at the current share price and the inputted number of shares is $32.3 billion.

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COMPANY NEWS

▶ 3 Top Stocks Under $20   [Aug-13-18 02:14PM  Motley Fool]
▶ 100th PGA Championship on SiriusXM   [Aug-06-18 11:00AM  PR Newswire]
▶ Phish Launches Exclusive SiriusXM Channel   [10:00AM  PR Newswire]
▶ [$$] Sirius XM Reports Higher Profit, Revenue   [09:38AM  The Wall Street Journal]
▶ Sirius XM: 2Q Earnings Snapshot   [07:55AM  Associated Press]
▶ Sirius XM Holdings Q2 Earnings Preview   [Jul-24-18 03:09PM  Benzinga]
▶ Streaming roundup: Netflix misses subscriber forecast, lands Sirius radio deal   [Jul-20-18 02:36PM  American City Business Journals]
▶ Sirius XM and Netflix Team Up to Deliver a Joke   [Jul-19-18 10:00AM  Motley Fool]
▶ [$$] Netflix Creating Comedy Radio Channel With SiriusXM   [Jul-18-18 08:01PM  The Wall Street Journal]
▶ SiriusXM Declares Quarterly Cash Dividend   [04:15PM  PR Newswire]
▶ Netflix tunes into SiriusXM for comedy radio channel   [02:23PM  American City Business Journals]
▶ [$$] Netflix Creating Comedy Radio Channel With SiriusXM   [11:00AM  The Wall Street Journal]
▶ Sirius XM Stock: Next Stop, $8.50?   [10:00AM  Motley Fool]
▶ 4 Best Efficient Stocks to Add to Your Portfolio   [Jul-13-18 11:47AM  InvestorPlace]
▶ Automotive Minute: Nissans Armada gets more tech for 2018 but still feels dated   [Jul-12-18 01:45PM  American City Business Journals]
▶ Coverage of The 147th Open on SiriusXM   [Jul-11-18 01:00PM  PR Newswire]
▶ 3 Reasons MoviePass Stock Is No Sirius XM Radio   [Jul-10-18 02:32PM  Motley Fool]
▶ 2018 MLB All-Star Coverage on SiriusXM   [10:00AM  PR Newswire]
▶ 3 Stocks With Impenetrable Moats   [Jul-09-18 07:21AM  Motley Fool]
▶ Verizon: Watch for a Deal for Sirius?   [Jul-02-18 10:53AM  Barrons.com]
▶ [$$] A Low-Priced Way to Ride Sirius' High-Priced Shares   [Jun-29-18 02:20PM  Barrons.com]
▶ Shawn Mendes to Perform for SiriusXM in Los Angeles   [Jun-28-18 07:15PM  PR Newswire]
▶ Tune In to the Long Side of Sirius XM   [Jun-20-18 03:23PM  TheStreet.com]
▶ 5 Stock Picks Under $10 for Millennials   [Jun-18-18 07:45AM  TheStreet.com]
▶ Sirius XM Stock: Next Stop, $8?   [Jun-14-18 01:40PM  Motley Fool]
▶ Sirius XM Settles to Keep Moving Higher   [Jun-12-18 10:06AM  Motley Fool]
▶ [$$] Sirius XM to Pay $150 Million to Settle Lawsuit Over Royalties   [Jun-11-18 05:50PM  The Wall Street Journal]
▶ Yahoo Finance Live: Market Movers - Jun 7th, 2018   [07:20AM  Yahoo Finance Video]
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