Sirius XM raises 2026 guidance with strong free cash flow and margin growth outlook

Sirius XM Holdings Inc. remains a Buy as it raised its 2026 guidance for revenue, EBITDA, and free cash flow, targeting $1.275 billion FCF on $8.525 billion revenue and $1.5 billion FCF by 2027. The company benefits from a loyal subscriber base, disciplined cost management, and declining capital expenditures, which support margin expansion and increased free cash flow. Despite a Q2 earnings per share miss, Sirius XM's stable average revenue per user and low customer churn underpin confidence in its long-term value and a potential share price of $40 based on a 10% free cash flow yield. This positions the company well for future share buybacks and enhanced capital returns.