Tuesday, May 01, 2007

Cowen and Company Calls sirius' Q1 An "Excellent Quarter

May 1, 2007

Cowen and Company: Q1 Results: Excellent Quarter; Best Executor; FCF on the Way

Conclusion: SIRI reported excellent Q1 results, with 556K net adds beating consensus by 13%, and our est. by 6%. We continue to view SIRI as an outstanding executer. We believe SIRI shares can outperform the market by 80% over the next year based on FCF potential, regardless of merger approval.

Excellent Subscriber Results.

Good, In-Line Financials.

Guidance Reiterated. Management reiterated guidance of revenue of $1B, YE subs of 8+MM, SAC of $95, Churn of 2.2-2.4%. We believe these metrics are within reach.

Operating Leverage Demonstrates FCF Potential.

FCF to Drive Outperformance Regardless of Merger Outcome. While merger concerns may limit near-term appreciation, we expect FCF pot’l to drive outperformance. We continue to believe SIRI shares can outperform the market by 80%+ over the next year.