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Will SIRIUS XM Holdings (SIRI) Surprise Earnings in Q1? - Analyst Blog

Zacks Equity Research
Updated

SIRIUS XM Holdings Inc. SIRI is set to release first-quarter 2015 results before the opening bell on Apr 28.

In the last quarter, the company delivered a 0.00% earnings surprise. Let’s see how things are shaping up for this announcement.

Factors at Play this Quarter

SIRIUS XM is poised to gain from strong telematics partnerships with almost all major car makers. Moreover, renewal of broadcast agreements for major sporting events and the launch of upgraded apps are likely to act as tailwinds while moving ahead.

On the flip side, SIRIUS XM largely depends on the U.S. auto industry for growth. Therefore, even a minor fluctuation in auto sales may significantly affect the company’s financials. Moreover, stiff competition from other industry players coupled with continuous evolution of technology may dent the company’s profits to a great extent.

Earnings Whispers

Our proven model does not conclusively show that SIRIUS XM is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are poised at 3 cents. Hence, the ESP is 0.00%.

Zacks Rank: SIRIUS XM carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

Meanwhile, we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

Groupon, Inc. GRPN with an Earnings ESP of +50.00% and a Zacks Rank #1.

Twenty-First Century Fox, Inc. FOXA with an Earnings ESP of +2.56% and a Zacks Rank #3.

Facebook, Inc. FB with an Earnings ESP of +3.33% and a Zacks Rank #3.


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SIRIUS XM HLDGS (SIRI): Free Stock Analysis Report
 
GROUPON INC (GRPN): Free Stock Analysis Report
 
FACEBOOK INC-A (FB): Free Stock Analysis Report
 
TWENTY-FST CF-A (FOXA): Free Stock Analysis Report
 
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Zacks Investment Research