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Sirius XM Holdings Inc. (SIRI) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Sirius XM Holdings Inc. (SIRI)

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Intrinsic Value (DCF)

Current$20.91
→
Intrinsic$75.70
+262%
$41.90$75.70$139.83
Market implies 6% growth for 5 years
DCF analysis suggests SIRI could have 262% upside at 25% growth — verify assumptions match your view.
At $21, the market prices in only 6% growth — below historical 25%, suggesting low expectations.
Range: Bear $42 → Bull $140. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$100$111$122$134
10%$61$68$76$84
12%$39$45$50$56
14%$26$30$34$39

Bull Case

  • Bull case ($140) offers 569% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (6%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($42) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$1.27B
Year 2$1.58B
Year 3$1.98B
Year 4$2.47B
Year 5$3.09B
Terminal$45.49B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.01BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is SIRI stock undervalued or overvalued?
🟢 UNDERVALUED

SIRI trades at $20.91 vs. our DCF-derived intrinsic value of $57.52, implying +166% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of SIRI's future cash flows. The bear case ($27.33) still suggests upside, providing margin of safety.

What is SIRI's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.01B, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $10.21B net debt and dividing by 0.34B shares: Bear $27.33 | Base $57.52 | Bull $101.98. Current price $20.91 implies +166% to base case.

How is SIRI's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($29.66B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.