Sirius XM


SIRI

recently announced that it has once again partnered with

Maxar Technologies


MAXR

, who will build and deliver two new geostationary communications satellites for SIRI.

These satellites are expected to help Sirius innovate and improve its service quality for subscribers and also expand the service area to deliver its continuous and reliable audio entertainment content to more people.

Maxar has been building satellites for Sirius for the past two decades with the first third-generation satellites SXM-9 and -10 launched last year. The launch of SXM-11 and -12 this year will bring the number of Maxar-built spacecraft for SiriusXM to 13.

As of September, there are more than 150 million SiriusXM-equipped vehicles on road in the United States and Canada. The twin high-powered digital audio radio satellites will ensure the best possible coverage across the states in both countries and provide the best customer experiences.

Sirius XM Enhances its Services Further

Along with strengthening its satellite availability, Sirius XM is also enhancing and upgrading its services to cater to the needs of its users.

Recently, it made algorithm improvements in Pandora, which scale up its model and add more signals derived from listener interactions with songs and artists to provide them with a personalized music experience.

In SiriusXM, it made several in-vehicle personalization improvements to the 360L product, which includes data-driven music and talk recommendations on 4U TAB.

The enhancements to the 360L user interface have significantly increased engagement and discovery of new content, including one-touch access to Pandora artist stations from SiriusXM’s Now Playing screen. These have made Sirius XM more user-friendly.

The improving models of Sirius XM have helped the company in bagging a significant deal with Lucid, an American electric vehicle manufacturer. From 2023, SiriusXM will be available for the first time in Lucid’s full lineup of electric vehicles.

Besides this, the new and used vehicle penetration rates have continued to remain strong at 83% and 53%, respectively, for third-quarter fiscal 2022.

To keep this momentum on, Sirius has rolled out an updated version of SiriusXM on Apple’s CarPlay with redesigned navigation, and a similar experience on Android Auto is expected in the coming months.

The company also plans to update the core SXM mobile app for iOS and Android with a design refresh that enhances navigation and streamlines content discovery.

Sirius XM’s revenue guidance for 2022 stands approximately at $9 billion while adjusted EBITDA is projected roughly around $2.8 billion.

Sirius XM’s shares have improved 1% year to date against the Zacks

Consumer Discretionary Sector

, which declined 34.4%.

Despite all the attractive enhancements being made by this Zacks Rank #4 (Sell) company, what comes as a headwind is the auto-sales softening as vehicle prices remain high in the ongoing inflation and hiking of interest rates. This could hinder the above-given guidance.

Sirius XM Faces Stiff Competition

Sirius faces stiff competition in the audio podcast industry from

Apple


AAPL

and

Spotify


SPOT

.

Apple’s shares have declined 21.7% year to date. Apple continues to bolster its presence in the music streaming space, backed by the acquisitions of Shazam and Asaii. The company diversified into the Augmented Reality (“AR”) market, differentiating its music service offerings and AR initiatives.

Spotify’s shares have lost 64.9% year to date. Spotify’s partnerships with Samsung and Google are expected to boost its subscriber base. Its solid focus on the personalization of playlists is more appreciated than that of Sirius.

You can see


the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here


.

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