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Sirius XM Holdings Inc.

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Sirius XM shares have underperformed the industry over the past year. The company faces intense competition in the streaming space from the likes of Apple and Spotify, which is expected to hurt the top line in the near term. Additionally, increasing royalty related expense is expected to keep margins under pressure. Moreover, slowdown in new car penetration due to reduced penetration in high fleet sales with a few automakers is also a concern. However, growth in subscriber base and higher average revenue per user (ARPU) aided fourth-quarter 2018 top line. The company’s subscriber base is witnessing growth owing to a strong content portfolio. Additionally, after Pandora acquisition, Sirius XM has more than 100 million listeners in North America. The acquisition is also expected to further boost its content slate, which is a positive.

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