Sirius XM Holdings scores 38 for management and 51 for moat. The management score rests on a return on invested capital of 4.6% and a gross margin of 47.0% — figures that describe capital earning less than it costs to employ. Debt sits at 0.84x equity. A moderate moat alongside weak management is a combination worth understanding before the price matters at all.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 1.3% a year, the rate measured from the filings. The exit multiple assumed is 8.0x. That produces an intrinsic value of $5.69, a 10-CAP price of $50.15 and a payback time price of $42.46, with the value zone set at the highest of the three, $50.15. Today's price of $25.64 sits inside that zone.
The price sits inside the value zone, but the business scores 51 for moat and 38 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $25.64 |
| Market cap | $8.6B |
| P/E ratio | 10.1x |
| Return on invested capital | 4.6% |
| Gross margin | 47.0% |
| Debt to equity | 0.84x |
| Free cash flow yield | 18.4% |
| Growth rate used | 1.3% |
| Growth rate measured | 1.0% |
| Exit multiple assumed | 8.0x |
| Company | Moat | Buy price |
| Interpublic Group (IPG) | 33 | $22.81 |
| Match Group Inc. (MTCH) | 61 | $53.45 |
| Madison Square Garden Sports (MSGS) | 42 | $37.89 |
| The New York Times (NYT) | 94 | $48.08 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Sirius XM Holdings rather than accepting ours.