- Pandora will not be able to maintain its user base with emerging technology behemoths and other competitors entering the market.
- Pandora has consistently reported negative earnings since their royalty, advertising and other expenses absorb all revenue.
- Pandora will not be able to follow through on its high growth expectation especially with the upcoming catalysts.
Pandora: Copyright Royalty Board Discussion Will Take Center Stage This Week
- CEO Brian McAndrews’ share purchase represents a strong statement of confidence in the long-term prospects of the company.
- Risk remains, as an unfavorable announcement on Tuesday could drive shares to new 52-week lows. We recommend hedging exposure with put options.
- Short interest has dropped significantly from over 26M shares to 19.3M, with days-to-cover reaching lows not seen since May. This could be an indication of a change in market outlook.
Update: Insider Buys Don't Change Our Tune On Pandora
- We wrote about Pandora at the end of October, and reiterated our $12 price target.
- The stock rallied Friday on news of the CEO buying shares.
- This doesn't change our tune - we keep our $12 price target.
- Pandora’s earnings results beat expectations; however, the slowing and possibly dead growth has severely wounded the stock.
- Pandora swears by its unique service and industry-leading algorithms, but is it any special?
- The future of this stock looks like anyone’s guess.
After Earnings, Another Brutal Blow To Pandora
- Pandora was hit after earnings, due to poor listener data.
- After the bell, Seeking Alpha wrote a report about the merging of iTunes and Beats Music.
- This is not good news for Pandora, as Apple is one of its biggest (if not definitely its biggest) "competition".
Pandora Q3 2014 Review: Subs Growth Needs To Pick UpWestEnd511 • Oct. 26, 2014
- Pandora reported a solid quarter but subs growth was stagnant.
- Management is confident on closing mobile monetization and listening gap.
- Apple could potentially be a long-term threat.
Update: Acute Competition Stymying Pandora's Growth
- Pandora announced better than expected Q3 results and guidance, but has fallen in pre-market trading, as active listener growth was abysmal.
- The lack of active listener growth and falling engagement has added to my bearish sentiment.
- I previously discussed how an influx of competition would hurt Pandora's future growth prospects.
Pandora's Growth Is Over: $12 Price Target Before Buyout
- Pandora reported earnings after the bell on Thursday.
- Pandora beat on both lines, but listener metrics are pointing to the fact that the growth story could be over.
- We believe Pandora will eventually move to the $10 area, before being bought out.
- Pandora reports Q3 earnings after-hours.
- Its decline in listener hours from May to June caused the stock to sell-off 9% in Q2.
- Meanwhile, Apple/Beats is attempting to cut content costs and subscription fees - potentially wringing profits from music streaming.
- The two combined could trip up Pandora in this quarter or the next. I rate the stock a sell.
- Pandora intends to add programming that will help it further challenge broadcast radio in the automobile.
- Howard Stern's contract with Sirius XM expires at the end of 2015.
- Given Stern's focus on interviews with musicians and other celebrities, he would be a perfect fit on Pandora.
After Victory Over Sirius, Turtles Go After Pandora
- Flo & Eddie is the company that owns the rights to The Turtles' songs.
- After a successful suit in Federal court ruling that Sirius had not obtained rights to broadcast those songs, Flo & Eddie filed suit against Pandora.
- Flo & Eddie seeks $25 million and class action status.
The Kool-Aid Is Evaporating For Sirius And Pandora
- Pandora traded up after Apple's $3 billion acquisition of Beats was leaked in May.
- Sirius, which also competes in music streaming, traded up as Pandora takeover rumors spread. Some even suggested that Sirius should buy Pandora.
- After months of speculation and no deal, investors will focus on both companies' fundamentals, which are not pretty. Both stocks are a short.
Are Lawsuit Damages And Pre-1972 Royalties A Threat To Pandora?
- The effect on Pandora of the Flo & Eddy, RIAA lawsuits.
- Why the complexity of the lawsuits could be a positive and negative for Pandora.
- SiriusXM and Pandora may be winners even if they lose.
Pandora Media Is Still A Good Investment For The Long Haul
- Pandora has been the fastest growing digital radio company over the past couple of years. With more than 200 million subscribers already under its belt, compared with about 26.3 million.
- The existing Beats Audio subscription service is not a big threat to Pandora Media. Beats has only 200,000 paying users compared to Pandora, which boasts 76 million monthly active users.
- All 10 of the 10 best-selling cars in the U.S. now have Pandora pre-installed in their music systems. Pandora accounts for about 9% of total radio listening in the U.S.
A Look Inside Pandora's New Kinder, Gentler Strategy
- Co-Founder Tim Westergren's adversarial approach to the music industry seems to be out of favor at Pandora.
- Westergren now takes a backseat to other top executives, particularly CFO Mike Herring.
- While the changes don't necessarily make Pandora shares a buy, keep an eye on what the company does next.
Pandora Media's Increasing User Base And How That Affects Its Stock
- Pandora Media had been experiencing a decline in user base due to increasing competition.
- This was countered by entering the automobile business which has helped the company increase its user base once again.
- The user base is expected to reach 120 million within the next 5-6 years.
- Stocks are likely to experience a 10% increase in price estimates if the user base increases to 120-140 million.
- Pandora is focusing on making its product better with features such as Promoted Stations, along with smart user engagement moves.
- Pandora is adopting strategies to use its expansive user base to its advantage.
- Pandora's recent deal will increase its content base and attract more users and advertisers to its platform.
- Pandora's fundamentals are strong and its bottom line growth projections are bright.
Fri, Jan. 23, 11:56 AM
- An OTR Global survey of 17 U.S. ad agencies found the agencies plan to significantly boost their Pandora (NYSE:P) ad spend this year, and are generally pleased with the performance of Pandora ads. OTR also reports Pandora local ad spend rose 90% Y/Y in Q4.
- Pandora, which closed yesterday less than a dollar removed from its 52-week low of $15.26, has surged above $17 on OTR's report. The data comes four months after eMarketer observed Pandora's share of U.S. digital ad spend (an estimated 1.4%) remains far below its digital time share (7.1%), leaving plenty of room for growth. The Web radio leader has been investing heavily in growing its local ad salesforce.
- Q4 results are due on Feb. 5. Shares go for 3x 2015E sales. This year's revenue growth consensus is at 31.9%.
Wed, Jan. 14, 1:20 PM
- A slew of tech companies have posted steep losses on a day the Nasdaq is down 1%.
- Major decliners include Pandora (P -5%), LED giant Cree (CREE -5.9%), cloud HR software leader Workday (WDAY -4.1%), chipmakers Ambarella (AMBA -5.3%), Pixelworks (PXLW -3.7%), Audience (ADNC -3.6%), Spansion (CODE -4.4%), and Cypress (CY -3.9%) (the last two are merger partners), OLED materials/IP provider Universal Display (OLED -4.2%), industrial automation tech provider Echelon (ELON -4.8%), and P2P lending giant/recent IPO LendingClub (LC -4.8%).
- Possibly affecting OLED: LG Display (NYSE:LPL) has been ordered to halt operations at an OLED TV panel production line following a gas leak that killed two workers.
- Cree and Pandora aren't far removed from their 52-week lows; the former reports on Jan. 20, and the latter on Feb. 5. LendingClub, whose selloff follows a volatile Tuesday, could be affected by a neutral coverage launch from Susquehanna.
Mon, Jan. 12, 12:42 PM
- Though the S&P and Nasdaq are both down 0.6%, Pandora (NYSE:P) has shot higher. 3M shares have been traded thus far vs. a 3-month daily average of 7.1M. Shares had made a fresh 52-week low of $16.02 on Friday.
- The gains come on a day when rival Spotify has announced it now has 60M users (15M paid), up from 50M (12.5M paid) only in November. Spotify, long rumored to be prepping an IPO, is a year removed from launching a free (ad-supported) mobile service. Many of its users are in Europe and other locales where Pandora doesn't operate.
- Pandora had 76.5M active listeners at the end of Q3. Q4 results arrive on Feb. 5.
Nov. 25, 2014, 10:51 AM
- Believing content costs could surge after the Copyright Royalty Board sets new performance royalty rates, FBR has downgraded Pandora (NYSE:P) to Underperform, and slashed its target all the way to $11 from $28.
- The downgrade comes a day after Pac Crest cut its 2015 and 2016 EPS estimates for Pandora, citing expectations for higher marketing and content costs.
- Pandora's content acquisition costs totaled $111.3M (46% of revenue) in Q3, +33% Y/Y but less than revenue growth of 40%.
Nov. 14, 2014, 9:53 AM
- Pandora (NYSE:P) CEO Brian McAndrews discloses he bought 25K shares on Wednesday at an average price of $18.58.
- McAndrews' purchase price wasn't far removed from a recently-set 52-week low of $17.55. Pandora remains down over 50% from a March high of $40.44.
- Separately, Pandora has announced it will host a CC on Tuesday to discuss its Web IV royalty rate proceedings before the Copyright Royalty Board.
Nov. 3, 2014, 5:35 PM
- ADEP, AMRS, ATVI, AWAY, AXLL, BIO, BIOL, BIRT, CALD, CBSO, CDXS, CERS, CHUY, CKEC, COHR, CORT, COUP, CRTO, CSU, DOX, DVN, ENPH, EXAM, EXEL, FANG, FEYE, FOXA, FRGI, GAS, GHDX, HR, ITRI, IVR, JAZZ, JIVE, JKHY, JMBA, KAR, MITT, MOSY, MPO, MYGN, NP, NRP, NSTG, NYMT, OAS, OCLR, OKE, OKS, PACD, PAYC, PBPB, PCYC, PEGA, PHH, PRI, PXD, PZZA, REGI, REXX, RLOC, RNR, RP, SBAC, SN, SPA, SQNM, TMH, TNET, TRIP, TTGT, TWO, TWOU, TX, UIL, WPX, XEC, XNPT, ZAGG, ZU
Oct. 30, 2014, 12:40 PM
- Less than a month after upgrading Pandora (P -3.1%) to Market Perform, Albert Fried's Rich Tullo has downgraded shares back to Underweight. His target has been cut by $4 to $16.
- Not surprisingly, Pandora's Q3 metrics are on Tullo's mind. "As Pandora’s monthly usage flattens below our original forecast to 76.6 million as compared to 78 million, we think Pandora will be challenged to manage content costs while expanding revenue at the current ad load." He adds Pandora risks losing users to rivals if it "expands ad load too fast."
- Tullo calls Pandora's launch of an Artist Marketing Platform (AMP) for musicians a positive, but considers it "too little too late," and says it "feels like a fig leaf" ahead of Copyright Royalty Board rate hearings.
- Pandora fell 20% in the time between Tullo's upgrade and downgrade.
Oct. 28, 2014, 6:38 PM
- Facebook beat Q3 estimates, but provided Q4 revenue guidance that was slightly below consensus at the midpoint.
- Twitter (NYSE:TWTR) -1.7% AH; shares fell 9.8% in regular trading due to yesterday's Q3 results and guidance.
- LinkedIn (NYSE:LNKD) -1.6%. Pandora (NYSE:P) -1.2%. YELP -1.6%. Zillow (NASDAQ:Z) -1%.
- Many of the same names sold off after Netflix and eBay's earnings two weeks ago.
Oct. 24, 2014, 12:48 PM
Oct. 24, 2014, 9:15 AM
Oct. 23, 2014, 6:18 PM
- Though its results and guidance beat expectations, Pandora (NYSE:P) reports it had 76.5M active listeners at the end of Q3, barely above the 76.4M it had at the end of Q2 and up only 5.2% Y/Y. Questions about the impact of competition are bound to come up.
- Listener hours totaled 4.99B, -1% Q/Q and +25% Y/Y; Y/Y growth benefited from the presence of a 40-hour free mobile listening cap during part of Q3 2013. Pandora's share of U.S. radio listening rose to 9.06% in September from 8.9% in June and 7.77% a year ago.
- Total Q3 ad revenue per thousand ad-supported listener hours (RPM) rose to $44.35 from $40.11 in Q2 and $39.68 a year ago. PC ad RPM +10% Y/Y to $64.13; mobile ad RPM +16% to $40.82.
- The RPM gains helped ad revenue rise 44% to $194.3M. Subscription/other revenue rose 25% to $45.3M. GAAP opex rose 48% to $114.8M, and content acquisition costs (driven by royalties) 33% to $111.3M.
- P -6.1% AH. Q3 results, PR
Oct. 23, 2014, 5:42 PM
Oct. 23, 2014, 4:06 PM| 7 Comments
Oct. 22, 2014, 5:35 PM
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Oct. 20, 2014, 2:47 PM
- Spotify is now offering family discounts: While the first family member signing up for its premium service pays the standard $10/month, each additional member pays only $5/month. "This is one of the most asked for features from our audience," says content chief Ken Parks.
- Meanwhile, Re/code reports Apple (NASDAQ:AAPL) has been pushing music labels to agree to price cuts that would allow it to sell an overhauled Beats Music streaming service (previous) for just $5/month. However, the site suspects Apple doesn't think the labels will give in, and considers an $8/month rate a more realistic goal.
- Pandora (P -1.9%) is lower on an up day for tech. Thus far, the company has done a decent job of staving off threats from subscription-based streaming services.
- Spotify, still possibly eying an IPO, had 10M paid subs and 40M active users spread out over 56 markets as of May. Pandora had 3.5M active subs and 76.4M active listeners (mostly in the U.S.) at the end of Q2. Its Q3 report arrives on Thursday.
Oct. 2, 2014, 10:33 AM
- Just a week after launching coverage at Hold, Topeka's Victor Anthony has upgraded Pandora (P +1.4%) to Buy.
- Anthony observes shares have fallen 9% since last week's coverage launch, and 43% from their March high. "The pullback creates a favorable risk-reward scenario, with 62% upside to our bull case model vs. 35% downside to our bear case model."
- Shares are moderately higher. Albert Fried, previously quite bearish on Pandora, upgraded shares to Market Perform on Tuesday.
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