Earnings results often serve as a barometer of what direction a company will take in the months ahead. With Q3 behind us, let’s take a closer look at Sirius XM (NASDAQ:SIRI) and its peers.
The Challenge of Shifting Consumer Habits
The massive physical footprints of cell phone towers, fiber in the ground, or satellites in space make it challenging for companies in this industry to adjust to shifting consumer habits. Over the last decade-plus, consumers have increasingly opted out of landlines and traditional cable subscriptions in favor of wireless communications and streaming video. These trends do mean that more households need cell phone plans and high-speed internet. Companies that successfully serve customers can enjoy high retention rates and pricing power since the options for mobile and internet connectivity in any geography are usually limited.
The 8 Wireless, Cable and Satellite Stocks We Track
While some wireless, cable and satellite stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.9% since the latest earnings results.
Weakest Q3: Sirius XM (NASDAQ:SIRI)
Known for its commercial-free music channels, Sirius XM (NASDAQ:SIRI) is a broadcasting company that provides satellite radio and online radio services across North America.
- Revenues: $2.17 billion, down 4.4% year on year. This print fell short of analysts’ expectations by 0.8%.
- Adjusted Operating Income and EPS Estimates: The company reported a significant miss of analysts’ adjusted operating income and EPS estimates.
- User Base: Sirius XM delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group, with 39.07 million users, down 2.5% year on year.
Unsurprisingly, the stock is down 15.3% since reporting and currently trades at $23.20.
Read our full report on Sirius XM here
Best Q3: Charter (NASDAQ:CHTR)
Operating as Spectrum, Charter (NASDAQ:CHTR) is a leading telecommunications company offering cable television, high-speed internet, and voice services across the United States.
- Revenues: $13.8 billion, up 1.6% year on year, outperforming analysts’ expectations by 1%.
- Adjusted Operating Income Estimates: The business had a satisfactory quarter with a decent beat of analysts’ adjusted operating income estimates.
- User Base: The market seems happy with the results as the stock is up 6.5% since reporting and currently trades at $348.82.
Is now the time to buy Charter?
Story Continues
Altice (NYSE:ATUS)
Based in Long Island City, Altice USA (NYSE:ATUS) is a telecommunications company offering cable, internet, telephone, and television services across the United States.
- Revenues: $2.23 billion, down 3.9% year on year, in line with analysts’ expectations.
- EPS Estimates: It was a slower quarter as it posted a significant miss of analysts’ EPS estimates.
- Stock Performance: The stock is flat since the results and currently trades at $2.63.
Read our full report on Altice here
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing.
- Rate Cuts: Recent rate cuts (0.5% in September and 0.25% each in November and December) have spurred the stock market, while a notable surge followed Donald Trump’s presidential election win in November.
- Uncertainty Ahead: The outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over.
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