Thursday after the markets close, Pandora Media Inc. (NYSE: P) will report its fourth-quarter financial results. Thomson Reuters has consensus estimates of $0.19 in earnings per share (EPS) and $276.53 million in revenue. The fourth quarter from the previous year had $0.11 in EPS and $200.79 million in revenue.
Pandora is a Merrill Lynch top pick in the Internet and e-commerce space for 2015. The company is clearly not the only company with a big desire to be in the music streaming business, but it is the current leader in installation and use in the automotive world, with a penetration rate right at 70%. Many on Wall Street expect a higher rate of Pandora adoption in new and used vehicles, which can help drive increased listenership and monetization of existing ad inventory.
The Cowen analyst team is very interested when Pandora reports in the advertising revenue figures, user count and total listening hours, as well as any provided color on the Copyright Royalty Board process. With the analysts expecting revenue of $275 million, that represents a large 37% year-over-year jump, driven by a 40% increase in advertising revenue.
It would be worth mentioning that Pandora’s leading competitor, Spotify, just announced that it has 15 million paid monthly subscribers and 60 million active users. Pandora reported 76.5 million active users in October. Also Spotify is still privately held and has recently hired Goldman Sachs to raise another $250 million in venture capital at a market cap more than double Pandora’s.
In February only three analysts have made calls for Pandora ahead of earnings:
- B. Riley reiterated a Buy rating with a $38 price target.
- J.P. Morgan maintained an Overweight rating but lowered its price target to $34 from $35.
- RBC Capital Reiterated an Outperform rating with a price target of $35.
The 50-day moving average reads at $17.57, and it has acted as resistance over the course of the fourth quarter and into the new year. Shares only rose to test in it late January and are still at that level. The 200-day moving average has acted as an overhang and is currently at $22.95.
Shares of Pandora were down 1% at $18.31 in the noon hour. The stock has a consensus analyst price target of $28.27 and a 52-week trading range of $15.26 to $40.44.