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Thread: Pandora down 10% on earnings

  1. #1
    MUSCLE13 is offline

    Pandora down 10% on earnings

    This is what happens when there is no barrier to entry for internet radio -

    Bloomberg excerpt -

    “Usage is stagnating, I think that’s the fundamental challenge, competition has been starting to take its toll,” Rich Greenfield, an analyst with BTIG LLC, said in a telephone interview. “That’s going to scare the market for what’s supposed to be a rapid growth Internet company.”

    Larger companies are building services to compete with Pandora, such as Google Inc.’s purchase of Songza Media Inc. and Apple Inc.’s acquisition of Beats Electronics LLC. The number of Pandora listeners and the amount of time they spend using the service is little changed on a monthly basis from December to June, said Greenfield, who rates the stock a sell.

  2. #2
    MUSCLE13 is offline
    By the way my price targets for 2014 year end for Sirius is $3.80 based on 20 times free Cash Flow per share of 19 cents and $4.80 for year end 2015 based on 20 times Free cash flow per share of 24 cents. With all the buyback activity I think my 2015 target may be conservative at this point.

    Take care everybody............Catch you next year.
    Last edited by MUSCLE13; 07-27-2014 at 11:35 AM.

  3. #3
    MUSCLE13 is offline
    Pandora crushed after earnings again today.........What a surprise Competition causing slowing of growth.

    When there is no barrier to entry for internet radio, how can anyone not have expected an avalanche of competition?

  4. #4
    MUSCLE13 is offline
    Costs rising, Competition increasing, and Growth slowing. Quite honestly did any sophisticated investor not know what was coming here? I remember Greenfield at BTIG called this years and years ago. I guess it took some time for the market to finally listen to him.

    WSJ -
    Last edited by MUSCLE13; 10-25-2014 at 12:27 AM.

  5. #5
    MUSCLE13 is offline
    LOL Look at what Greenfield just wrote today again. How come nobody listened to him before? Mindboggling.

    Rich Greenfield ‏@RichBTIG

    Remember unlike @Netflix, there are no barriers to entry in online music

    BTIG Research


    We continue to believe Pandora is significantly overvalued (link). Last night, management finally admitted that user growth and listening hour growth would be harder to come by going forward as c...

  6. #6
    Faulkner_SA is offline
    Faulkner_SA's Avatar
    Joined: Feb 2013 Posts: 223
    I wrote about all this back in 2012 what about meeee?

  7. #7
    MUSCLE13 is offline
    Quote Originally Posted by Faulkner_SA View Post
    I wrote about all this back in 2012 what about meeee?
    Nice article. You know Mel often said and Meyer now says that nothing stops Sirius from doing anything that the internet radio companies do.

    Question of business model I think. It's just a bad business. You know they want to attack it some way but how do you get the EBITDA margins? I don't think anybody has figured that out yet. I think more Sirius internet is coming though either internally or by acquisition. I wish I could see the EBITDA vision in internet radio. I see it in satellite and the connected car business. I haven't seen it in internet radio.

  8. #8
    MUSCLE13 is offline
    By the way Stephen I am very happy with Sirius' potential right now as opposed to when Mel left. There were just so may question marks. New CEO, Apple entering radio, future of buybacks etc. The whole path that has been taken is almost as if Mel never left. They have stayed the course strategically and financially. And I see it very undervalued on Mel's favorite metric - Free Cash Flow - which Meyer has totally focused on.

    With the aggressive buybacks, and used cars ramping I see $6 per share by year end 2016 based on 20 time FCF per share. Jessica has a 12 month target of $5 based on Discounted cash flow. I see $6 in 2 years. I think we are extremely undervalued. And I definitely did not see that when Mel left. But now they are in a different position. Free Cash Flow Per Share tells the story. This company should have an incredible 2 year run.

  9. #9
    MUSCLE13 is offline
    Albert Fried & Company downgraded Pandora Media Inc (NYSE: P) Thursday from Market Perform to Underweight and lowered its price target from $20 to $16.

    The report noted "critical issues with Pandora users, usage, and content costs" and expected "the shares to be dead money owing to the uncertainty that Pandora can grow its user base, optimize its content costs, and manage usage."

    Analyst Rich Tullo also thought "there are growing alternatives in the streaming music space and Pandora risks losing users if it expands ad load too fast."

    Competition is heating up with Spotify, Soundcloud out of Europe along with iHeart, Songza, iTunes radio, and TuneIn Radio in the IP radio space, all of which may be seen as growing threats.

    Other analysts, however, have been singing a different tune on Pandora.

    Tullo raised his Q4 2014 estimates to $265 million from $245 million and still thought "there is significant downside to management's guidance ($275 at the mean). We think if the trend of flat user growth continues, auto sales in 4Q14E flatten, and political advertising for Pandora is in the $2 million range it is unlikely Pandora will match its guidance."

    The report concluded that "as it stands now, Pandora is looking for a $30 million bump in 4Q revenue when usage and user growth is flat; we argue guidance is too high."

    Pandora Media Inc recently traded at $18.70, down 2.7 percent.

  10. #10
    MUSCLE13 is offline
    For all the techies that posted here over the years that forgot that business models matter -


    Era of Free Digital Music Wanes
    Artists and Labels Prod Music Services to Convert Listeners to Subscribers

  11. Ad Fairy Senior Member
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