Pandora Media Inc (
reached a new 52-week high of $31.94 on Friday, Nov 15, 2013. The
bullish run reflects Pandora's impressive second quarter results,
improving monetization and steady market share despite
significant competition particularly from
The closing price of Pandora on Nov 15 was $31.56, representing a
strong one-year return of about 320.2% and a year-to-date return
of about 232.6%. The S&P 500 jumped 29.7% and 23.0%,
respectively during the same period.
Pandora delivered a positive earnings surprise of 150.0% over the
past four quarters. This Zacks Rank #3 (Hold) stock has a market
cap of $5.97 billion and long-term expected earnings growth rate
Key Growth Catalysts
Pandora reported an impressive second quarter of fiscal 2014.
Although the company reported loss of 2 cents per share (in line
with the Zacks Consensus Estimate and flat year-over-year),
revenues surged 58.0% from the year-ago quarter to $162.0
million. Mobile revenues surged 92.0% from the year-ago quarter
to $116.0 million.
Improving monetization as evident from a 31.8% year-over-year
jump in total advertising revenue per thousand listener hours (ad
RPMs) aided results in the quarter. Moreover, listener hours
improved 18.0% year over year to 3.88 billion in the quarter.
Active users jumped 30.0% to 71.2 million at the end of the
Although its active listener base continues to decline on a
month-over-month basis, we believe that Pandora's already popular
service, driven by its effective discovery engine and well
established infrastructure, places it well to compete against the
likes of Apple, Spotify,
Sirius XM (
Additionally, Pandora raised approximately $400.0 million from
its stock offering in September, which it expects to use for
domestic and international expansion as well as for strategic
acquisitions. However, rising costs related to licensing will
remain a headwind in the near term.
The Zacks Consensus Estimate for the third quarter remained
steady at earnings of a penny over the past 30 days. For fiscal
2014, the estimate has remained unchanged at a loss of 16 cents
over the past 30 days. For fiscal 2015, the earnings estimate has
plunged 40.0% (2 cents) to 3 cents per share over the same
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