Is This Struggling Value Stock Going to $0?

The writing may be on the wall for Sirius XM Radio (NASDAQ: SIRI), but don't be surprised if the struggling value stock isn't paying attention. The country's lone satellite radio provider specializes in the spoken -- not the written -- word.

This doesn't mean that ignoring recent problematic trends is the right approach for Sirius XM investors. It's been six years since the platform reached its peak in subscribers. Revenue has declined slightly for three consecutive years. These are real issues for a scalable business with high fixed costs and low variable overhead. However, if you think that Sirius XM is going to zero anytime soon, you will probably be disappointed.

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It's a long fade-out

The last few years haven't been kind to Sirius XM shareholders. The media stock has declined for five consecutive years, shedding more than two-thirds of its value in that time. The operator of the satellite radio monopoly has faced challenges in wooing young drivers with easy access to streaming apps through connected cars. Its own brazen acquisition on that front -- a $3.5 billion stock deal for the Pandora platform seven years ago -- hasn't been a game changer.

There is still a lot going right for Sirius XM. For starters, barring a sharp collapse in the final eight months of 2026, this could be the year it ends the unfortunate five-year streak of declines. The stock is trading 35% higher year to date. It closed out 2025 with back-to-back years of increasing subscribers. That's good, right?

Sirius XM remains highly profitable. It's eyeing $1.35 billion in free cash flow this year. It's a cash cow, and it doesn't mind being milked. Sirius XM pays a generous quarterly dividend that, even after the stock's 2026 pop, still yields an impressive 4%.

There's also a Warren Buffett connection. Did you know that Sirius XM's largest shareholder is Berkshire Hathaway? Before Buffett stepped down at the end of last year, his company built up a 37% stake in Sirius XM. Berkshire Hathaway isn't perfect. It has swung and missed before. Naturally, it can also unload the stock at any point in the future.

It still doesn't seem prudent to bet against Sirius XM. Trailing revenue is just 5% below its all-time high of $9 billion from 2022. Back to its effervescent profitability, Sirius XM is trading for less than 9 times forward earnings. Finally, analysts see the bottom line growing in 2027 on a marginal increase in revenue.

The business is still vulnerable to a softening economy. A premium in-car audio experience would be one of the first things that families cut out of their budgets. However, the flip side to that argument is that business can shift into a higher gear if the economy, auto market, and driving trends improve. It's not a perfect situation, but Sirius XM isn't likely to wipe out its investors in the near future.

Rick Munarriz has positions in Sirius XM. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.