Even with Warren Buffett no longer at the helm of Berkshire Hathaway, his investment philosophies still resonate throughout its vast portfolio. For investors seeking undervalued opportunities, Berkshire’s holdings offer a treasure trove of potential. One such company attracting attention is Sirius XM Holdings (NASDAQ: SIRI), the satellite radio giant, where Berkshire holds a significant 37% stake.
The past five years have been turbulent for Sirius XM, with its stock price taking a hit due to fierce competition from streaming services, a shrinking subscriber base, and declining revenue. However, this challenging period may have created an enticing entry point for discerning investors.
Sirius XM faces the critical need to adapt. It must transition from operating as a high-growth entity to embracing its role as a mature business, prioritising a robust balance sheet. This shift necessitates a recalibration of investor expectations, a process that is still underway and continues to impact the stock’s performance.
In 2025, Sirius XM reported revenue of $8.5 billion, a 2% decrease from the previous year, and a net loss of 301,000 subscribers. Despite these figures, there’s cause for optimism. For investors who grasp Sirius XM’s ongoing transformation, the current stock price may represent a bargain compared to its potential value in the coming years.
The company’s improving financial standing, particularly in an uncertain economic climate, is a key factor contributing to its undervaluation. While revenue declined last year, the market seems to be overlooking the impressive turnaround in its bottom line. After reporting a net loss of $2 billion in 2024, largely due to a non-cash impairment charge of $3.3 billion, Sirius XM bounced back with a net income of $805 million in 2025.
Furthermore, capital expenditures are projected to decrease across both satellite and non-satellite operations in the years ahead. This development will bolster Sirius XM’s financial position, allowing it to increase its free cash flow.
Free cash flow is projected to reach approximately $1.3 billion in 2026 and $1.5 billion in 2027. This financial strength provides the company with the flexibility to implement shareholder-friendly initiatives, such as increasing dividends or buying back shares.
| Financial Metric | 2024 (Actual) | 2025 (Actual) | 2026 (Projected) | 2027 (Projected) |
|---|---|---|---|---|
| Revenue (Billions) | $8.7 | $8.5 | N/A | N/A |
| Net Income (Millions) | -$2,000 | $805 | N/A | N/A |
| Free Cash Flow (Billions) | N/A | N/A | $1.3 | $1.5 |
