Zacks Analyst Blog Highlights: SIRIUS XM Radio, Comcast, Apple Inc, Research In Motion and Google

Mar 25, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, March 25, 2011 /PRNewswire/ -- Zacks.com Analyst Blog features: SIRIUS XM Radio Inc. (Nasdaq: SIRI), Comcast Corp. (Nasdaq: CMCSA), Apple Inc (Nasdaq: AAPL), Research In Motion Ltd. (Nasdaq: RIMM) and Google Inc (Nasdaq: GOOG).

(Logo:  http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579

Here are highlights from Thursday's Analyst Blog:

Serious Problem for SIRIUS XM

Satellite radio service provider SIRIUS XM Radio Inc. (Nasdaq: SIRI) is facing a lawsuit from none other than its star performer Howard Stern. Recently, Mr. Stern has complained that SIRIUS XM failed to pay him stock awards that it granted based on a specific subscriber growth target. According to the SIRIUS XM management, the company was "surprised and disappointed by the lawsuit."

Immensely popular radio-jockey Howard Stern hosts talk-show in SIRIUS XM. Many analysts considered the performance of Howard Stern as one of the primary reasons for the company's gradual recovery in the last couple of years when it was facing bankruptcy threat due to severe recession. Stern's earlier contract with SIRIUS XM was of $500 million for 5 years and was concluded in December 31, 2010. On December 9, 2010, SIRIUS XM announced that the company entered into a new 5-year agreement with Howard Stern. However, the company did not disclose the financial terms of the new contract.

Fiscal 2010 was a turnaround year for SIRIUS XM after a pathetic 2009 when the company almost went bankrupt. SIRIUS XM ends fiscal 2010 with a record high total subscriber base of nearly 20.2 million, up 8% year over year. As of now, after Comcast Corp. (Nasdaq: CMCSA), the company is the second largest entertainment subscription service provider in the U.S.  Management is expecting to add 1.4 million net subscribers in 2011.

However, we believe this fabulous target may remain unreachable to the company if any serious difference between Mr. Stern and SIRIUS XM occurs. Several industry researchers estimated that discontinuation of Howard Stern shows in SIRIUS XM may result in loss of approximately 1 million subscribers to the company.

SIRIUS XM is facing severe competitive threat from Pandora Internet radio. Pioneer System, a leading car information system manufacturer, unveiled a new car stereo, which can detect Pandora Internet radio settings from Apple Inc's (Nasdaq: AAPL) iPhones or iPods. Besides, the iPhones or iPods can be used to conveniently set customized music stations for individual users while driving. Pandora has 80 million registered users in the U.S. and provides a unique algorithm that increases the intrinsic quality of the music. In addition to iPhone, Pandora has also developed streaming services for BlackBerry devices of Research In Motion Ltd. (Nasdaq: RIMM) and Google Inc's (Nasdaq: GOOG) Android-based smartphones.

In this juncture, we believe future financials of SIRIUS XM will suffer if its legal battle with Howard Stern lingered. This will affect both the top line in the form of loss of subscribers and also the bottom line with higher legal expenses. We maintain our long-term Neutral recommendation on SIRIUS XM. Currently, it holds a short-term Zacks #3 Rank (Hold) on the stock.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5514.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5516

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4580.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter:  http://twitter.com/ZacksResearch

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

SOURCE Zacks Investment Research, Inc.



RELATED LINKS

http://www.zacks.com