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Sirius XM Soars To $3.43, Is $4.00 Next

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Shares of Sirius XM (SIRI) continue its torrid pace reaching yet another 52-week high on Monday to $3.41. I asked recently "how high can Sirius fly" and with each successive trading session, the stock has responded.

Remarkably, the stock is pushing higher even as rumors continue to surface that Apple (AAPL) is planning to launch a streaming music service of its own. Despite all of these concerns and constant worries from writers like me, Sirius remained a model of execution – one that was very evident in the company’s recent first-quarter earnings report.

First, subscribers continue to prove how much they love the service. However, while self-pay subs are still growing, churn also grew to 2%. While this is not entirely a concern since 2% has been Sirius' "standard performance baseline," it shouldn't be ignored, either.

The total paid subscriber base reached a record 24.4 million, up 9% from the prior year. Self-pay net subscriber additions were 304,000, a slight increase from the first quarter of 2012, while the overall self-pay subscriber base reached a record high of 19.9 million, up 9% from a year prior. Total paid and unpaid trials grew by 443,000 year over year to 6.2 million.

As a sign of strong working model, free cash flow reached a new first quarter record – jumping to $142 million, up from $15 million. Given Sirius' growth momentum, it's anyone's guess where the stock is heading next. But certainly $3.50 seems like an easy target from this level.

Disclosure: At the time of publication, Richard held shares in Apple and no positions in the other companies mentioned.


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