Dec. 10, 2013, 1:34 PM
- Though still generally below their mid-October highs, Internet momentum stocks are turning in what might be their best performance during a rally that has now lasted two weeks. While Twitter (previous) is the star of the show, Facebook (FB +3.5%), Yelp (YELP +1.8%), Groupon (GRPN +4.7%), Netflix (NFLX +2.1%), LinkedIn (LNKD +1.4%), and Pandora (P +3.4%) aren't getting left out.
- Several Chinese Internet names are also higher. In addition to Baidu, which is benefiting from a bullish Pac Crest note, Sina (SINA +6%), Ctrip (CTRP +6.1%), Qunar (QUNR +6.3%), and Youku (YOKU +3.9%) are staring at big gains.
- Morgan Stanley's Scott Devitt is out with another bullish note on Groupon. Devitt notes an MS survey of 358 SMBs found only 26% of merchants have run Groupon deals in the last 12 months, something he thinks suggests there's "a long run way of merchants" that can still be signed up.
- He also sees room for Groupon to improve its customer targeting - the company still isn't able to track which deals were shown to customers, or were clicked on, in prior e-mails - and expects its new site (allows deals to be browsed without an e-mail address being given) and a revamped e-mail layout to boost growth.
Dec. 6, 2013, 12:01 PM
- A day after giving up its morning gains in response to a report that Spotify plans to offer limited mobile access to its library on an ad-supported basis, Pandora (P -2.5%) is selling off on an up day for equities. A note from Albert Fried's Rich Tullo could be playing a role.
- Tullo, who downgraded Pandora to Underweight last month prior to its FQ3 report, isn't worried about the competitive threat posed by Spotify's new service, given Pandora has held its own against Spotify thus far and "the ease of use case of the Pandora platform defends Pandora’s market share."
- He is, however, worried Spotify's willingness to pay higher royalty rates to artists will affect Pandora's 2014 negotiations with recording rights organization SoundExchange (responsible for a huge portion of Pandora's royalty payments).
- Tullo: "We think 2014 will be a tough year for Pandora from a news flow perspective ... artists may be going into the negotiation from the position that Pandora needs to pay 4x to 10x more per performance."
- Pandora recently gave up on trying to get the Internet Radio Fairness Act passed, and said it would focus on lobbying the Copyright Royalty Board for rate changes.
Dec. 5, 2013, 4:10 PM
- The WSJ reports Spotify will offer free, ad-supported access to its streaming library on mobile devices for the first time. However, while the service will allow users to "play a limited number of songs on demand," it will "mostly serve up music based on the user’s input."
- Thus far, Spotify has only provided free library access to PC users; free mobile users have been limited to Spotify's streaming radio service. However, that service, which has been around for nearly 18 months, is more of a direct competitor to Pandora (P -0.1%) than the library service.
- Spotify currently claims 20M active users and 6M paid subs (many of them in Europe, where Pandora doesn't operate). Pandora, by comparison, had 72.4M active listeners in November, and 3.18M paid subs at the end of October.
- This is far from the first time Pandora has sold off due to Spotify-related news. Shares currently +220% YTD.
- Previous: Pandora slips amid reports of Spotify service launch
Dec. 5, 2013, 3:41 PM
- Up nearly 2% earlier in afternoon trading, Pandora (P -0.1%) has given up its gains following headlines stating Spotify plans to offer a free music service.
- The headlines are somewhat puzzling, given Spotify already offers free (ad-supported) streaming services to go with its (ad-free) subscription services.
Dec. 4, 2013, 8:47 AM
- Pandora (P) is ahead 2.6% in the premarket after monthly metrics show gains on both a yearly and monthly basis in the face of iTunes Radio.
- Active listeners of 72.4M as of the end of November is up 16% Y/Y, and up from 70.9M in October.
- Pandora's share of total U.S. radio listening of 8.44% is up from 7.17% a year ago, and from 8.06% in October.
- Listener hours of 1.49B is up 18% Y/Y, and up from 1.47B October.
Nov. 27, 2013, 2:10 PM
- 14 months after the Internet Radio Fairness Act (aims to put Internet radio royalties on par with satellite streaming royalties) was brought before Congress, Pandora (P -1.6%) has given up on trying to get the bill passed in the face of staunch opposition.
- Billboard reports Pandora will now focus on lobbying the Copyright Royalty Board for changes; the board is set to deliberate on royalty rates for the 2016-2020 timeframe.
- The strategy change comes at a time when Pandora's content costs, which are tied to listener hours, are declining as a percentage of revenue, largely thanks to improving mobile monetization. That's naturally going over well with investors, but also might affect Pandora's leverage to cut a better deal.
- Meanwhile, the EU is set to make it much easier for streaming music providers to obtain licensing deals from copyright organizations that simultaneously cover all member states.
- Pandora has stayed out of Europe thus far due to licensing challenges; its services are only offered in the U.S., Australia, and New Zealand. Spotify, which just raised funding at a reported $4B valuation, has grown like wildfire on the continent.
Nov. 21, 2013, 4:24 PM
- Pandora (P) expects FQ4 revenue of $185M-$190M and EPS of $0.02 vs. a consensus of $187.3M and $0.04. Investors were apparently hoping for better numbers given the company's huge YTD gains.
- Ad revenue (79% of total revenue) rose 36% Y/Y in FQ3 to $144.3M, after growing 44% in FQ2. Mobile ad sales grew 58% to $104.9M.
- Salesforce investments continue to pressure EPS: sales/marketing spend rose 90% Y/Y to $50.6M (they rose 95% in FQ2). But content acquisition costs only rose 32% (they rose 35% in FQ2), trailing revenue growth of 50% thanks to improved monetization.
- Pandora's total ad revenue per thousand listening hours (RPM) rose to $40.11 from $38.87 in FQ2 and $32.40 a year ago. A gap still remains between mobile and PC monetization, but it's narrowing: Mobile ad RPM was $36.00, up from $33.90 in FQ2 and a mere $25.59 a year ago, and PC ad RPM was $57.54, down slightly from $59.51 in FQ2 and $58.03 a year ago.
- Listener hours, aided by the September removal of Pandora's free mobile monthly listened cap, totaled 4.18B, up 8% Q/Q and 17% Y/Y.
- P -5.4% AH. CC at 5PM ET. FQ3 results, PR.
Nov. 21, 2013, 4:05 PM
- Pandora Media (P): FQ3 GAAP loss per share $0.01.
- Adjusted EPS $0.06 vs consensus $0.06.
- Revenue of $181.6M (+50% Y/Y) beats by $6.8M. Shares -3.64% . (PR)
Nov. 21, 2013, 12:10 AM
Nov. 20, 2013, 5:35 PM
Nov. 19, 2013, 1:34 PM
- Albert Fried has cut Pandora (P -3%) to Underweight ahead of Thursday's FQ3 report, citing valuation. The firm's PT is unchanged at $23.
- Analyst commentary going into earnings has been very positive overall. JPMorgan and Needham recently raised their PTs, and Susquehanna and Piper have joined in today.
Nov. 15, 2013, 11:56 AM
- Three days after Needham issued a bullish note on Pandora (P +6.2%) ahead of its Nov. 21 FQ3 report, JPMorgan is joining in. The firm has raised its PT to $35 from $25, while declaring the Internet radio leader is nearing a revenue "inflection point" thanks to share gains and salesforce investments.
- Also helping Pandora: Hedge funds Coatue Management and Tiger Consumer Management (both offshoots of Julian Robertson's Tiger Management) have disclosed they respectively opened 1.1M and 2.9-share positions in Pandora in Q3. Between them, Coatue and Tiger Consumer owned over 2% of the company at quarter's end.
- Stephen Mandel's Lone Pine Capital owned 10.1M Pandora shares at the end of Q3, unchanged from when Lone Pine originally disclosed a position in the company on Oct. 3. (13F)
Nov. 13, 2013, 3:49 PM
- Six days after dropping in the face of Twitter's strong debut, high-flying Internet names are rallying in the wake of Chinese microblogging leader Sina's Q3 beat and strong Q4 guidance.
- The day has also seen a dismal IPO from online textbook rental leader Chegg, a WSJ report of a rejected $3B+ Facebook offer for Snapchat, and a vague afternoon rumor about M&A interest in Trulia from Realogy.
- U.S. standouts: ZNGA +7.4%. LNKD +4.8%. P +3.3%. ANGI +2.6%. GSVC +4.1% (owns a Chegg stake).
- Chinese standouts: QIHU +8.9%. SFUN +7.5%. LITB +6.4%. YY +6.9%. CYOU +6.3%. QUNR +5.7%. CTRP +3.7%.
- Baidu (BIDU +1.4%) is up moderately following news Chinese online video rivals Sohu (SOHU +1.7%) and Youku (YOKU +3%) have joined the MPAA and various entertainment/media companies in suing it for piracy. The assorted parties accuse Baidu of enabling piracy through its video search engine, as well as through video player apps and a TV dongle.
- The suit comes as Baidu ramps its content spending for its iQiyi and PPS video sites.
Nov. 12, 2013, 3:50 PM
- Needham's Laura Martin has raised her Pandora (P +3.8%) PT to $33 from $25, and has also lifted her FY14 (ends Jan. '14) and FY15 estimates. Martin sees the Web/mobile radio leader posting FQ3 results (due Nov. 21) that are better than prior estimates, and expects the company to continue its momentum in subsequent quarters.
- Also: Martin asserts Pandora's sales investments give it an option on the $14B local radio ad market, and that the company has a 5-year lead in the auto market.
- Previous: Pandora higher after releasing Oct. listener metrics
Nov. 7, 2013, 11:48 AM
- Even as Twitter blasts off to a $25B valuation following its much-hyped IPO, U.S. and foreign Internet stocks are giving back some more of the massive 2013 gains that have led many names to trade at steep multiples.
- One sign investors in this space are in a profit-taking mood: Zillow (Z -4.3%) and YY both sold off yesterday in spite of delivering Q3 beats (I, II) and above-consensus guidance; Zillow is adding to its losses today. Likewise, SouFun (SFUN -5.4%) has turned negative after providing a Q3 beat and strong guidance.
- Notable U.S. decliners: FB -2.4%. LNKD -2.8%. GRPN -4.7% (reports after the close). ZNGA -2.7%. P -3.8%. TRLA -5.4%.
- Notable foreign decliners: BIDU -2.4%. QIHU -6.7%. SINA -5% (generally viewed as the Chinese Twitter). DANG -6.2%. VIPS -7.7%. RENN -4.2%. AMAP -4.7%. CTRP -5.7%. YOKU -5.6%. RENN -4.2%. YNDX -5.1%. MELI -2.4% (plunged yesterday thanks to a Q3 miss). SIFY -2.6%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Nov. 5, 2013, 10:05 AM
- Pandora's (P +2.8%) October listener hours totaled 1.47B +8% M/M (aided by an extra day) and +18% Y/Y. The Y/Y growth rate is on par with September's 16%, even though iTunes Radio launched on Sep. 18. The company's 40-hour free monthly mobile listening cap was lifted on Sep. 1. (PR)
- Pandora's share of U.S. radio listening was 8.06%, up from 7.77% in September, 7.46% in August, and 6.61% a year ago.
- Pandora's listening growth came even though active listeners fell by 1.8M M/M to 70.9M, evidence Apple may be picking off Pandora's less fervent fans. On a Y/Y basis, active listeners were still up 20% (September's growth was 25%).
- An analyst defending Apple once said the "stickiness of an installed base" represents "one of the most undervalued assets" in tech. Might the same hold for Pandora?
- Also: CFO Michael Herring says Pandora might use some of the funds it raised through its recent stock offering to finance international expansion. The company's streaming services are currently offered only in the U.S., Australia, and New Zealand.
- Previous metrics: September, August
Pandora Media, Inc. provides an internet radio service in the United States, Australia and New Zealand. It offers a personalized experience for listeners to listen radio on smartphones, tablets, computers and car audio systems and Internet-connected devices. The company has developed a form of... More
Industry: Internet Information Providers
Country: United States
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