This Ridiculously Cheap Warren Buffett Stock Could Make You Richer

In the pantheon of value investing, few names loom larger than Warren Buffett. For decades, his knack for spotting undervalued gems has turned seemingly ordinary companies into multibillion-dollar winners. Today, as markets grapple with uncertainty, Buffett’s Berkshire Hathaway (BRK.B) portfolio holds a stock that embodies his “buy low, sell higher” philosophy—Sirius XM (SIRI). At current valuations, this satellite radio giant is trading at a price that even the Oracle of Omaha would call “ridiculously cheap.” Here’s why investors should take notice.

The Buffett Playbook: Why SIRI Fits the Bill

Warren Buffett’s investment criteria are well-documented: a focus on companies with strong cash flows, defensible moats, and mispriced valuations. Sirius XM checks all three boxes. Despite a 50% stock decline since late 2022, Buffett added 5 million shares to Berkshire’s position in late 2024, boosting its stake to over 117 million shares—a $2.7 billion bet on a rebound.

The Numbers: A Bargain at 8x Earnings

What makes SIRI “cheap”? Consider the math:
- 2025 Earnings Multiple: Sirius XM’s stock trades at less than 8 times its 2025 expected earnings of $3.05 per share.
- 2026 Outlook: Analysts project earnings to jump to $4.00 per share, implying today’s price is just 6x forward earnings.
- Dividend Yield: Investors also get a 4.7% forward yield, a rare combination of income and growth potential in today’s market.

The Catalysts: Why the Turnaround Is Coming

SIRI’s valuation discounts two near-term challenges: slowing revenue growth and competition from streaming giants. But Buffett isn’t betting on the past—he’s banking on strategic shifts that will redefine the company’s future:
1. Ad Tech Overhaul: Sirius XM is integrating its Pandora division with The Trade Desk’s Unified ID 2.0, modernizing ad targeting and boosting revenue per listener.
2. Cost Cuts: Capital expenditures are being slashed to near zero by 2028, freeing cash to reinvest in growth or dividends.
3. Core Strength: 90% of SIRI’s subscribers use its service in cars—a sticky, high-LTV audience that’s hard to replicate.

The Competition: Other Buffett Picks, But SIRI Stands Out

Berkshire’s portfolio includes other undervalued names like Kraft Heinz (KHC) (trading at 9x earnings) and Chubb (CB) (12x forward P/E). However, SIRI’s dividend yield and asymmetric risk-reward profile make it uniquely compelling. Even Buffett’s famed Coca-Cola-style “forever holdings” pale in comparison to the 20%+ potential SIRI offers if it meets 2026 earnings targets.

The Risks: Why the Market Is Skeptical

No investment is without risk. SIRI faces headwinds:
- Streaming Competition: Spotify and Apple Music continue to erode traditional radio’s dominance.
- Economic Sensitivity: A recession could pressure discretionary spending on subscriptions.

Yet these risks are already priced into the stock. As Buffett once said, “Be fearful when others are greedy, and greedy when others are fearful.” Today, SIRI’s price reflects maximum pessimism—a rarity in a market that often overpays for growth.

The Bottom Line: A Buffett-Backed Bargain at $530

As of April 2025, SIRI trades at $530.96 per share, near its 52-week low. With a 20% earnings growth target for 2026 and a fortress balance sheet ($3.5 billion in cash), the stock is primed to rebound. If history is any guide, Buffett’s track record of buying undervalued assets—like American Express in 1964 or Wal-Mart in the 1980s—suggests investors who follow his lead could profit handsomely.

Final Analysis: Time to Bet on the Rebound

Sirius XM’s valuation is a screaming buy signal. At 8x earnings and with a dividend yield unmatched by most tech stocks, it offers a rare blend of safety and upside. Buffett’s multi-billion-dollar bet isn’t just a vote of confidence—it’s a masterclass in value investing. For long-term investors, SIRI isn’t just “cheap”—it’s a once-in-a-decade opportunity to align with the greatest value investor of our time.

Final Call: Buy SIRI at $530.96. Target: $650 by 2026. Risk: $450 (20% downside). The math—and the Oracle—favor the bulls.