Sirius Stock Predictions: Rising Sales of Smart Home Speakers Is A Tailwind For Sirius XM

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First


  • Sirius XM can get a boost from rising sales of smart home speakers.
  • Amazon’s Echo series of home assistants and Sonos wireless speakers now support Sirius XM. The Alexa-powered Echo is the world’s best-selling smart speaker.
  • CIRP estimates that there are now 45 million smart speakers in use in the United States.
  • Smart home speakers can help Sirius XM reduce its reliance on car sales. The impending risk is future cars might drop the satellite radio in favor of connected infotainment.
  • SIRI has bullish near and long-term algorithmic market trend forecasts.

The continuing success of Sirius XM (NASDAQ: SIRI) is thanks to factory-installed satellite radios on new cars. Strong U.S. car sales still contribute to the growth in subscribers for Sirius XM. At the end of last year, Sirius XM has 32.74 million subscribers in the U.S. Car sales will likely remain as the key growth driver of Sirius XM. However, I realize that the United States is also seeing surging sales in smart home speakers.

As per CIRP’s estimate 18 million smart speakers were sold in the U.S. last Q4 2017. There are now 45 million installed smart speakers in America. Some of the owners of these 45 million smart speakers could be potential subscribers to the $5/month add-on to Sirius XM’s streaming service for its existing satellite radio subscribers. They could also be potential new customers for Sirius XM’s $15.99/month full streaming package (no need to have a satellite radio).

Siri pic1

(Source: CIRP)

Going forward, the much cheaper tags of smart speakers can make them an important growth driver for subscription radio service providers like Sirius XM. Amazon’s (AMZN) $99 Echo smart assistant and the Alexa-powered $199 Sonos Wireless speakers support Sirius XM. The large library (200 channels) of Sirius XM will likely encourage Google (GOOG) and Apple (AAPL) to also eventually enable Sirius XM support in their smart speakers. When this happens, Sirius XM could possibly gain 5 to 10 million more subscribers.

Why Sirius XM Needs More Non-Car-Generated Subscribers

The importance of growing subscribers is it could help Sirius XM get a larger discount in music licensing. Content owners will likely charge lower royalty fees if Sirius XM has a bigger base of monthly-paying subscribers. To achieve this goal, Sirius XM needs a bigger ecosystem. It has to grow beyond the automobile industry.

The chart below illustrates that Sirius XM’s growth is slowing down. It needs new recruitment channels (like smart home speakers) where it can attract paying subscribers. Previous forecasts expect U.S. car sales will decline by 1.5% to 5% this year. Providing its service to smart home speakers could help Sirius XM offset future declines in U.S. car sales.

Siri pic2

We should also remember that more future cars will have pre-installed online connectivity. Most car manufacturers will probably stop pre-installing satellite radio. They will replace them with in-vehicle infotainment services. Sirius XM has a subsidiary involved in Telematics. Unfortunately, giant companies like Apple (AAPL), Google (GOOG), and Microsoft have their own Telematics/connected vehicle solutions. It will be very hard for Sirius XM to compete against those firms.


Expanding its subscription services to smart speakers, game consoles, and smart TVs increases the total addressable market of Sirius XM. The growing need to modernize is why Sirius XM bought 19% of Pandora (P) last year. Sirius XM knows that its automotive industry-fueled satellite radio business model is approaching stagnant growth status.

I Know First has a very bullish one-year algorithmic forecast score for SIRI. I submit to this positive endorsement and rate SIRI as a buy. I Know First has a very high one-year predictability score for SIRI, 0.79. It means I Know First has a long history of accurate 1-year predictions for Sirius XM’s stock.

Siri pic3

Monthly technical indicators and moving averages analysis also endorses a buy rating for SIRI.

Siri pic4


Past I Know First Success With SIRI

On July 12, 2017, I Know First published a premium article saying that it’s time to sell Sirius XM’s stock as it would likely be stagnant in H2 2017 and H1 2018. I Know First has been bullish on Sirius XM’s stock on 1 and 3 months and bearish for 1 year time horizon. As the time went by we expected that Sirius XM’s stock would likely trade sideways at around $5 price level and that it should not hit $6. We suggested to sell it at that time and use the money to invest in other more promising tickers.  From the below graph one can see that on 1 and 3 months horizons the algorithm successfully predicted the movement of the SIRI stock price which outperformed the NASDAQ index by some 2% – 5%. As of today we continue to see growth of the SIRI stock price gaining 20.23% since the forecast provided on July 12, 2017, which also resonates with the most recent I Know First  bullish forecast published here.

SIRI graph pic5

(Source: Yahoo Finance)

This bullish forecast for SIRI was sent to I Know First subscribers on On July 12, 2017. To subscribe today click here.

I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

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