Sirius XM Current Financial Leverage

SIRI -  USA Stock  

USD 6.47  0.02  0.31%

Sirius XM's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Sirius XM's financial risk is the risk to Sirius XM stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Additionally, take a look at the analysis of Sirius XM Fundamentals Over Time.

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Sirius XM Debt Non Current is most likely to increase significantly in the upcoming years. The last year's value of Debt Non Current was reported at 5.26 Billion. The current Long Term Debt to Equity is estimated to increase to 4.86, while Issuance Repayment of Debt Securities is projected to decrease to roughly 272.8 M.

Sirius Current Financial Burden

Sirius XM's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Sirius XM's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Sirius Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Sirius XM's stakeholders.

Asset vs Debt

Equity vs Debt

Given the importance of Sirius XM's capital structure, the first step in the capital decision process is for the management of Sirius XM to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Sirius XM Holdings to issue bonds at a reasonable cost.

Sirius XM Financial Leverage Rating

Sirius XM Holdings bond ratings play a critical role in determining how much Sirius XM have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Sirius XM's borrowing costs.
Overall Bond Rating
Not Rated
Average S&P Rating
N/A
Piotroski F Score
6  Healthy
Beneish M Score

Sirius XM Holdings Debt to Cash Allocation

As Sirius XM Holdings follows its natural business cycle, the capital allocation decisions will not magically go away. Sirius XM's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors. Many companies eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
The company currently holds 9.33 B in liabilities with Debt to Equity (D/E) ratio of 12.44, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. Sirius XM Holdings has a current ratio of 0.31, indicating that it has a negative working capital and may not be able to pay financial obligations when due.

Sirius XM Inventories Over Time

Sirius XM Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Sirius XM uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.

Sirius XM Debt Ratio

    
  62.53   
It seems as roughly 37% of Sirius XM's assets are financed be debt. Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Sirius XM's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Sirius XM, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a Sirius XM debt ratio should be compared their industry average or other competing firms.
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Sirius XM Holdings Historical Liabilities

While analyzing the current debt level is an essential aspect of forecasting the current year budgeting needs of Sirius XM, understanding its historical liability is critical in projecting Sirius XM's future earnings, especially during periods of low and high inflation and deflation. Many analysts look at the trend in assets and liabilities and evaluate how Sirius XM uses its financing power over time.

Understaning Sirius XM Use of Financial Leverage

Sirius XM financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Sirius XM's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Sirius XM assets, the company is considered highly leveraged. Understanding the composition and structure of overall Sirius XM debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it.
Please read more on our technical analysis page.
Last ReportedProjected for 2021
Total Debt5.3 B5.7 B
Debt Current6.3 M6.5 M
Debt Non Current5.3 B5.7 B
Issuance Repayment of Debt Securities321.4 M272.8 M
Long Term Debt to Equity 3.95  4.86 
Debt to Equity Ratio 3.95  4.99 
Sirius XM Holdings Inc. provides satellite radio services on a subscription fee basis in the United States. Sirius XM Holdings Inc. is a subsidiary of Liberty Media Corporation. Sirius XM operates under Broadcasting classification in the United States and is traded on NASDAQ Exchange. It employs 5726 people.

Sirius XM Investors Sentiment

The influence of Sirius XM's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Sirius. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.

Current Sentiment - SIRI

Sirius XM Holdings Investor Sentiment

Majority of Macroaxis users are at this time bullish on Sirius XM Holdings. What is your outlook on investing in Sirius XM Holdings? Are you bullish or bearish?
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2% Bearish
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Additionally, take a look at the analysis of Sirius XM Fundamentals Over Time. Note that the Sirius XM Holdings information on this page should be used as a complementary analysis to other Sirius XM's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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When running Sirius XM Holdings price analysis, check to measure Sirius XM's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Sirius XM is operating at the current time. Most of Sirius XM's value examination focuses on studying past and present price action to predict the probability of Sirius XM's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Sirius XM's price. Additionally, you may evaluate how the addition of Sirius XM to your portfolios can decrease your overall portfolio volatility.
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The market value of Sirius XM Holdings is measured differently than its book value, which is the value of Sirius that is recorded on the company's balance sheet. Investors also form their own opinion of Sirius XM's value that differs from its market value or its book value, called intrinsic value, which is Sirius XM's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Sirius XM's market value can be influenced by many factors that don't directly affect Sirius XM Holdings underlying business (such as pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Sirius XM's value and its price as these two are different measures arrived at by different means. Investors typically determine Sirius XM value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Sirius XM's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.