It has certainly been a welcomed sight for investors in Pandora (P) as the equity climbed over 8% in trading on Tuesday, May 8. There was no particularly earth-shattering news surrounding the company, but rather a continuation of listener and mobile advertising growth.
Pandora is the leading Internet radio service, and continued that dominance with an announcement that it now has an impressive 150 million registered users. The announcement came at the International CTIA Wireless 2012 conference. Even better than that, active users -- defined as people who have engaged the service in the last month -- are now at nearly 52 million. Pandora President and CEO Joe Kennedy said:
The continued growth of Pandora shows that personalized radio is fundamentally changing the way people listen to music. Mobile connectivity has allowed us to deliver on our mission of providing people with music they love at a scale that presents unprecedented opportunities for both artists and advertising partners.
More than 100 million users have accessed Pandora via a smartphone or tablet. This market has developed in only the past few years, and Pandora use is growing almost as fast as smartphone adoption. Pandora boasts over 1 billion listening hours per month, with 70% of the listening originating from a mobile or other connected device. An incredible one out of every three U.S. smartphone users now listens to Pandora on a monthly basis.
Pandora's stock price has been suffering of late and the company needed some compelling reasons why the Street should consider it a good bet. It would appear that Pandora wants to get back to the magic that allowed it to IPO at $16. With that in mind, the company announced several key factors investors will want to consider:
- Pandora has now announced partnerships with 25 automotive brands and aftermarket companies to offer personalized radio via the in-dash entertainment system using the connectivity of a smartphone.
- There are 48 models currently available at dealerships, with more than 10 additional models expected in 2012.
- Mobile advertising revenues grew from $25 million in FY 2011 to more than $100 million in FY 2012, making Pandora second only to Google in the U.S. in terms of mobile advertising revenue.
- Listener hours for Pandora during the month of April 2012 were 1.06 billion, an increase of 87% from 566 million during the same period last year.
- Share of total U.S. radio listeners for Pandora in April 2012 was 5.95%, an increase from 3.11% at the same time last year.
- Active listeners were 51.9 million at the end of April 2012, an increase of 52% from 34.0 million during the same time period last year.
Pandora seems to be continuing growth despite what the naysayers suggest. The company does have a challenging business model and it will be some time before getting a true valuation on this company is possible, but Pandora seems to be headed in the correct direction.
I still see Pandora as a stock for investors who like to play ranges. Look for low points near $8.50 and high points near $9.25 for the time being.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
