Pandora Media reported its Q3 fiscal 2011 earnings recently, and based on continued fast growth and slight cost improvements, we have revised our price estimate to $9.48. Shares closed Friday at $10.78.
Although the company�s results have been on track, the stock is still an expensive proposition, especially in the face of emerging competition.
Pandora�s competition comes from radio services such as Sirius XM as well as emerging Internet-based music services such as Spotify, which is expanding via Facebook.
See our full analysis for Pandora
Inflated expectations overshadow solid earnings
The company continued its fast paced growth but overall, it stayed in line with our expectations except for a minor revenue increase. The company�s total listener hours and revenue doubled from the same quarter last year, but this was not something unexpected.
Nevertheless, we did notice some improvements among cost items compared to our previous expectations. This was most prominent for sales and marketing expenses.
New Efforts Continue
The company signed a deal with DMX recently, which is a provider of background music at businesses. With this new partnership, Pandora will be able to penetrate into business customer segment and add a new dimension to its customized service.
Furthermore, Amazon�s new Kindle Fire launch with several apps including one for Pandora that will help the media company expand its distribution channel.
Competitive Threat Rising
No comments:
Post a Comment