The Warren Buffet Stock That Has A Good Predicted Price Target In 2025 Despite Recent Struggles

Warren Buffet is not called the "Oracle of Omaha" without excellent reason. The legendary investor of many decades has an incomparable, long-lasting track record of picking out winners for his Berkshire Hathaway company portfolio. His latest pick of 2025 is Sirius XM, a company made up of two separate businesses.

Thanks to Sirius XM's new initiatives intended to restart growth, the stock is gaining new attention. Buffet has recently made a major investment into the unique content provider. His Berkshire Hathaway now owns a stake of 35% in the Sirius XM Holdings that trades on NASDAQ under the ticker SIRI, per Yahoo! Finance.

Wall street analysts are taking notice as well. Analyst Matthew Harrigan of Benchmark recently issued future price guidance of $32 per share on SIRI stock. This target represents a potential upside of 44% from the point that shares closed at last week. It could be a great winner for long-term-hold investors in company's like Home Depot or Wendy's.

Today's SiriusXM Holdings comprises the two businesses of SiriusXM and Pandora. Its legacy primary business, Sirius XM, broadcasts talk shows, music, news, and sports through two proprietary satellite radio networks. The majority of customers pay a membership fee and listen in their vehicles. SiriusXM radios are factory preinstalled on a large variety of automobiles throughout the United States and Canada. The business expanded in 2019 to include Pandora Media, a streaming music outfit that delivers both a subscriber-based on-demand service and advertising sponsored radio.

What has always separated Sirius XM from the competition is the means by which it garners revenue. The company raked in around 77% of net sales from subscribers and about 20% from advertisers in the first three quarters of 2024. This insulates it from economic cycles since subscribers tend to be far more loyal to their subscriptions than businesses may be with advertising budgets. Yahoo! Finance points out that this allows the Sirius XM operating cash flow to remain predictable and more reliable.

SIRI stock bumped 6% higher at one point on its earnings release day of Thursday, January 30th as it reported both 2024 year and fourth quarter earnings. The firm managed to surpass analyst expectations for both its top and bottom lines. Future initiatives the company announced also helped to propel the company stock.

The recent outlook for Sirius XM has been a mixed bag. Headwinds included its intensifying competition for listeners with traditional and online-based radio stations. Another problem the company has is that the new vehicle sales that Sirius XM relies on to continue moving promotional subscribers into full paying ones have been lackluster.

Yet in this latest earnings release, the company saw strong additions of full-paying subscribers. For the full year, self-paying subscribers may have declined, but in the fourth quarter Sirius XM grew the base by 149,000 new paying subscribers. This was a dramatic improvement versus 2023 Q4. A Nasdaq article suggests that the stock may be significantly undervalued if company management successfully pulls off the new strategies and reaches their goals of attaining 2027 free cash flow of $1.5 billion.

Sirius XM also enjoys an interesting value-based proposition. While the stock market now is among the most expensive historically, SIRI stock is available at little more than seven times its forward-year guidance for earnings. Assuming management delivers on holding down spending and implements pricing increases on the company's near-monopoly power, shareholders should be well-rewarded. Despite past struggles for the company, it still enjoys a greater ability to raise subscriber prices compared to competing streaming services and radio stations. The SIRI $32 stock price target may not be too much to anticipate, unlike with the popular AI stock predicted to fall in 2025.