Earnings to Watch After the Close

February 21, 2018 by Chris Lange

Pandora Media Inc. (NYSE: P) and Roku Inc. (NASDAQ: ROKU) are scheduled to report their most recent financial results after the markets close on Wednesday. Pandora has been around for a while and investors can gauge where this stock is headed. However, Roku is reporting its second quarter ever as a public company and this may be tougher to call.

Analysts are calling for Pandora to report a net loss of $0.07 per share and $376.43 million in revenue. The same period of last year reportedly had a net loss of $0.13 per share and revenue of $392.6 million.

After its most recent quarterly report, Pandora saw its shares plummet despite meeting Wall Street expectations. This stock has been a train wreck for a while, but the company has still managed to stay afloat despite not turning a profit.

On the other hand, Pandora is growing. In its third quarter, total paid subscribers increased to 5.19 million from 4.01 million in the same period of last year, growing approximately 29% year over year. Subscription and other revenue was $84.4 million, a 50% year-over-year increase.

Ahead of the report, a few analysts weighed in on Pandora:

  • Stifel has a Hold rating with a $5.50 price target.
  • Roth Capital has a Buy rating with a $10 price target.
  • Morgan Stanley has a Hold rating with a $6 price target.
  • Cleveland Research has a Hold rating.

Shares of Pandora were last seen down about 2% at $5.20 on Wednesday, with a consensus analyst price target of $7.88 and a 52-week range of $4.09 to $13.36.

As for Roku, analysts expect to see a per-share net loss of $0.10 and revenues of $182.54 million.

The company had a phenomenal initial public offering (IPO) in 2017. After initially selling 15.66 million shares at $14.00 apiece, the stock vaulted higher. In fact, it may have been one of the great stories for all IPO investors in the past year or so, after several other key IPO disappointments were seen elsewhere.

After closing out 2017 at $51.78, Roku shares were up more than 150% from the prices investors were buying the stock for in late October. And Roku even hit a high of $58.80 on December 19, with a closing all-time high share price of $56.58.

Now those same bull-riding investors have to wonder if all the good news has already been priced into Roku. Some recent analyst calls into the start of 2018 indicate that Roku may still be a great company, but the undertone and actual ratings may have quickly turned Roku into one of the most grossly overvalued stocks for investors.

A few analysts weighed in on the stock ahead of the earnings report:

  • Citigroup has a Positive rating.
  • Morgan Stanley has an Underweight rating with a $25 price target.
  • Oppenheimer has an Underperform rating with a $28 price target.

Shares of Roku traded down about 1% to $50.76, in a post-IPO range of $15.75 to $58.80. The consensus price target is $32.80.

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