Hedgehog, let me try another earnings estimate of SIRI.
I am looking at the far future, the final end, maybe
in about 15 years or so, when SDARS has got its saturation.
My assumptions for the year _2015_:
-240 million cars, 90% of them have some kind of radio,
==> 216 million cars with radio.
-35% of these cars have SDARS. (This lies somewhere between
the MITRE estimations and and the estimations of the Soundview
Group. see reply #57)
==> 77.8 million SDARS subscribers.
-Let us assume SIRI gets 55% of them, and XMSR 45%
(because SIRI has no commercials on their own 50 channels,
whereas XMSR has a few minutes commercials per hour.
And I think SIRI has the better satellite/reciever technologie)
==> 42.8 million Sirius subscribers for cars.
-Home radios:
50 million homes might have sat radio. (Here I take the numbers of
the MITRE corp.) Maybe 35% of them go to SIRI, and 65% to XMSR,
because XMSR has the better programming for hispanic people,
a very fast growing part of the US population.
==> 17.5 million home subscribers for SIRI in 2015.
Now some of these home subscribers also have Sirius radios in their
cars, so they might get their second sat radio service for half price.
So the 17.5 mil would perhaps correspond to 10 million "full" subscribers.
(Just a guess).
-Ships, boats and planes:
let me assume another 200,000 subscribers for SIRI.
-Together SIRI might have 53 million subscribers in 2015.
-SIRI needs 2 million subscribers for EBIT break even, so
51 million subscribers contribute with 42% net earnings profit
margin to SIRIïs earnings. (see post # 56)
-My guess is that in 2015 the subsciption price is about $12.50.
(Note that someone of the management recently said that a lot
of people might be willing to pay a Dollar more for Howard Stern
programmings, so I think SIRI is thinking of rising their
subscriber prices some day.)
==> $150 revenue per subscriber and year.
-Let me add to this number another $25 per year and subscriber for
CD ordering commisions and advertising of the 50 channels left.
==> $175 revenue per subscriber and year.
-Let us assume 72 million commons in 2015, after all options
are exercised, all Preferreds are converted, and maybe some
other 6 million stocks are sold to go through the first 2 years.
-in 2015 I still expect a PER of 25 - 30, after the whole system is established
and might have no more growth in their kernel business, but SIRI is a high
profit margin company, and I think they will use this money to invest
somewhere else in some other media ventures.
With all these assumptions we get:
Total revenue in 2015: $9.275 billion ($175 * 53 million subscribers).
Net earnings in 2015: $3.75 billion !!!
($175 * 51 million subscribers * 0.42 profit margin.
(note: 51 million, not 53 million)
Earnings per share: $52 in 2015. ($3.75 billion / 72 million)
Result:
===================================
SIRI quote in 2015: $1300 - $1560
===================================
Some final remarks:
Of course a lot of other things can happen until 2015.
Perhaps the FCC might sell a few additional SDARS licences,
But on the other hand I think that SIRI will buy back a few
of their commons till 2015, (they will have enough money for
that !), and this might compensate the stock prise to the
growing competition.
Although I have "calculated" this quote for the year 2015,
I expect this quote much more earlier. Because SIRI is connected
to the telematic business, and telematic stocks will experience
the same "irrational excuberances" in a few years (imagine this
extremly huge market, when besides the US and Europe also
a lot of Asian want to have their own cars in 10 years!)
that we have seen in the high tech, internet and biotech business.
Regards,
Manfred. |
