Bear Of The Day: Pandora Media (P)

Originally launched in 2000, Pandora Media (P - Free Report) is often referred to as an Internet radio pioneer. Its technology has helped it lead the free online music listening movement. With Pandora, a listener can enter a single song, artist, or genre to start a station, and its mathematical algorithms will combine with individual and collective feedback to suggest songs and build personalized playlists.

Pandora offers its users a free, ad-supported version, as well as Pandora Premium, a $9.99 per month subscription that lets you play and choose any song or album and utilize playlist creation features.

Sitting at a Zacks Rank #5 (Strong Sell), Pandora reported mixed fourth-quarter results, but the company has been on a steady decline for a few years now. Is there any chance for a rebound for this Internet radio innovator?

Q4 Earnings: A Deep Dive

Last week, Pandora reported an adjusted loss per share of 21 cents, missing the Zacks Consensus of a loss of 7 cents and falling short of the year-ago quarter’s loss of 13 cents per share as well.

Revenues grew just 0.7% to $395 million, which beat our consensus estimate of $375 million. If you exclude sales from Ticketfly and the recent winding down of operations in Australia and New Zealand, sales would have climbed 7%.

Subscription and other revenues increased as well, up 63.2% year-over-year thanks to subscriber growth and higher average revenue per paid subscriber (ARPU).

ARPU was $6.08, up 32.8% from the year-ago period; this metric was driven by growth in Pandora Premium subscribers.

However, advertising revenues fell 5% to $297.7 million, while total listener hours declined 6.5% on a year-over-year basis to 5.03 billion. The number of active listers also decreased, down 6% year-over-year to 74.7 million.

Earnings Estimates

For the current quarter, one analyst cut their outlook in the last 30 days, and the consensus has dipped from $-0.25 to $-0.26. Earnings are expected to decline about 8.3% for this time period.

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Alexa Graham 6 months ago Member's comment

I like #Pandora, but don't see how they can compete against the giants like #Apple, #Amazon, and #Google, $AAPL, $AMZN, $GOOGL