Sirius XM (NASDAQ:SIRI) stock has been killed amid the Covid-19 pandemic, with shares falling more than 25% year-to-date because reduced consumer mobility (i.e. we aren’t commuting to work anymore) has led to higher-than-normal subscriber churn at the premium radio company over the past few months.

Interestingly enough, while the rest of the market has bounced back from its Covid-19 lows, SIRI stock has not. Shares trade only a fraction above where they did back in late March, on the idea that the work-from-home shift is permanent, and therefore, so is this current reduced consumer mobility headwind for Sirius XM.

Such fears, however, are overblown.

While the work-from-home shift is permanent, reduced consumer mobility is not — and as 2021 rolls around, Sirius XM’s growth trends will get back to normal. As those growth trends rebound to pre-Covid levels, so will SIRI stock, which broadly means that over the next 12+ months, this depressed stock could rip more than 60% higher.

Needless to say, that upside potential makes SIRI stock a buy today.

Here’s a deeper look.

Consumer Mobility will Rebound

The days of office centricity are over. The work-from-home era has arrived. But that doesn’t mean consumer mobility will forever be depressed. Instead, it just means consumer mobility going forward will be different.

On the work front, some employees will shift to work-from-home forever. Some will go back to the office every day. Some will have a mix of in-office and at-home work. In that hybrid work world of the future, the amount of time we spend commuting goes down, but it doesn’t go to zero.

Meanwhile, the reduction in commute time will likely be offset by a rise in leisure and errand car time. With employees working from home, they now have the ability to do grocery or other errand runs throughout the day. At the same time, because humans like to go and do things, employees who have worked from home all week are more likely to go out for dinner on Friday night, and go for a cruise on Saturday/Sunday.

Overall, then, while the work-from-home trend is permanent, depressed consumer mobility is not, because commuting to and from work is only one piece of the consumer mobility pie. While it will shrink going forward, there will be growth. The amount of times we spend in our cars — and listening to radio in those cars — will remain at steady and healthy levels.

Of course, that’s great news for SIRI stock.

Sirius XM’s Strong Long-Term Value Prop

Sirius XM has a strong long-term value prop in the in-car entertainment world.

The company offers ad-free, no-hassle radio which seamlessly integrates with most modern cars and which gives consumers an easy, frictionless way to play great music while driving.

Some have stipulated that the rise of Spotify (NYSE:SPOT) means the end of Sirius XM. But the latter offers a differentiated enough value prop in terms of music discovery and built-in connectivity with most auto OEMs.

The platform has continued to grow at a cadence of roughly 300,000 new subscribers every quarter. Over the past three years (a stretch in which Spotify has become nearly ubiquitous in the United States).

So, Sirius XM and Spotify can co-exist, with the former being used for in-vehicle audio and the latter being used for audio in almost all other situations.

Meanwhile, Sirius XM is doing everything right to dominate the in-vehicle entertainment market. The company is expanding its content portfolio, growing its built-in vehicle connections and launching a new platform called 360L.

In sum, Sirius XM will succeed in the long run — and SIRI stock will charge higher — so long as the auto market rebounds and consumer mobility goes back to normal.

Sirius XM Stock Can Rally 60%

The auto market will rebound in a big way in 2021, as economic activity normalizes against the back of record-low interest rates and record-high fiscal stimulus.

Meanwhile, consumer mobility will rebound in 2021, too, as consumer fatigue of quarantining kicks in and as we inch closer and closer to public access to a Covid-19 vaccine.

Consequently, in 2021, consumers will buy a lot of cars, and they’ll likely spend a lot of time in those cars. That’s a perfect environment into which Sirius XM can sell its in-vehicle radio platform.

To that end, Sirius’ growth rates will rebound in 2021 back to pre-Covid levels. As they do, SIRI stock will stage a similar rebound to pre-Covid levels.

Before the pandemic, this was a $7 stock. I see prices above $8 as doable by the end of 2021. That implies about 60% upside from current levels.

Bottom Line on SIRI Stock

SIRI stock remains depressed from Covid-19 aftershocks because investors perceive work-from-home as a permanent shift.

They’re not wrong.

But they are wrong in thinking that a permanent shift to work-from-home environments will result in a permanent reduction in consumer mobility. This is because, commuting to and from work is only one piece of the consumer mobility pie. It will shrink over time.

As it shrinks, other pieces of the pie will grow (like errand running, leisure car trips, road trips, etc), and overall consumer mobility will remain at very healthy levels.

To that extent, Sirius XM’s growth trends will rebound meaningfully in 2021 as the auto market and consumer mobility trends rebound. So will SIRI stock, likely towards above the $8 level, implying 60%+ upside potential from current levels.