Sirius Satellite Radio, the most active American stock over the last three months, recorded its biggest decline in 21 months after two analysts said the shares were expensive and lowered their recommendations.

Shares of Sirius, the second-largest pay-radio service behind XM Satellite Radio Holdings Inc., had almost tripled this year with most of the gain coming this quarter. The company signed radio show host Howard Stern to a five-year deal in October and hired former Viacom President Mel Karmazin as chief executive in November.

“While we remain bullish on company fundamentals, we believe the recent surge in the stock has taken Sirius to levels which are difficult to justify using any reasonable valuation framework,” said a Smith Barney analyst, Niraj Gupta. He cut his rating to “sell” from “hold.”

Sirius dropped $2.11, or 23.45%, to $6.90, in Nasdaq Stock Market composite trading, its largest slide since March 2003. About 457 million shares changed hands, seven times more than the second-most active security.

Bear, Stearns & Company analyst Robert Peck said the rally this quarter has made Sirius more expensive than XM Satellite. Mr. Peck, who cut his rating to “peer perform” from “outperform,” said Sirius trades at a 20% premium to his estimate for discounted cash flow next year.

An average of almost 100 million shares of Sirius have traded a day for the last three months, the largest amount among stocks worth at least $1 a share. Its three-month average surpassed trading in the Nasdaq-100 tracking stock at 99 million shares a day, Intel at 72 million shares, and Microsoft at 70 million shares.

Sirius exceeded the 100-million share mark in the first 10 minutes of trading yesterday. The stock fell as much as 31%.

Technology stocks such as Sirius, CMGI, and VA Software – two Internet companies – have been among the most active this month. They captured investor attention and peaked during the bull market of the late 1990s and now trade at less than $3 a share.

“It’s the casino mentality,” said David Briggs, head of trading at Federated Investors, which oversees $184 billion in Pittsburgh. “A lot of people get attracted to something that has high volume and a low dollar price. Making 50 cents on a $9 investment is better than 50 cents on an $80 one.”

Smith Barney’s Mr. Gupta is the only analyst on Wall Street to recommend selling Sirius shares. Seven recommend buying the stock and 12 rate it a “hold.”

Sirius shares may also be falling on a Wall Street Journal report that said the stock is overvalued, the company is overpaying for content, and that management is too optimistic on how many new subscribers Mr. Stern will attract.

Last week, the company hired basketball Hall-of-Famer Bill Walton, an aficionado of the rock band “The Grateful Dead,” to host a weekly music program. Sirius also disclosed a deal to broadcast the National Collegiate Athletic Association men’s basketball tournament and English soccer.

XM Satellite said yesterday that Toyota will install its receivers as a factory option on new cars. Sirius signed a deal to have its units offered as a dealer option on Toyota cars. Shares of XM Satellite fell 41 cents to $38 yesterday.