What to Watch For in Pandora Earnings

Pandora Media Inc. (NYSE: P) is scheduled to release its most recent quarterly results after the markets close on Thursday. The consensus forecast calls for a net loss of $0.38 per share on $303.99 million in revenue. In the same period of last year, the company said it had a net loss of $0.24 per share and $316 million in revenue.

The recorded music industry is in great shape, its revenue having grown 16.5% last year. However, the winners have shifted from traditional forms of distribution, an advantage for several large companies.

According to the Recording Industry Association of America:

In 2017 revenues from recorded music in the United States increased 16.5% at estimated retail value to $8.7 billion, continuing the growth from the previous year. At wholesale, revenues grew 12.6% to $5.9 billion. Similar to 2016, these increases came primarily from growth in paid music subscriptions which grew by more than 50%. This is the first time since 1999 that U.S. music revenues grew materially for two years in a row.

The association also noted:

Streaming music platforms accounted for almost 2/3rd of total U.S. music industry revenues in 2017, and contributed nearly all of the growth. The streaming category includes revenues from premium subscription services, streaming radio services including those revenues distributed by SoundExchange (like Pandora, SiriusXM, and other Internet radio), and ad-supported on-demand streaming services (such as YouTube, Vevo, and ad-supported Spotify).

Spotify reported its most recent quarterly results Thursday morning and they were not up to par. Could this be the same for Pandora?

Excluding Thursday’s move, Pandora had underperformed the broad markets, with its stock down 48% in the past 52 weeks. However, in just 2018 alone, the stock was actually up close to 17%.

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

  • Wedbush has a Buy rating with an $8 price target.
  • JPMorgan has a Neutral rating with a $7 price target.
  • Raymond James has a Buy rating with an $8 target.
  • Barrington Research has a Hold rating.
  • Macquarie has a Hold rating and a $5 price target.
  • Stifel has a Hold rating with a $7 price target.

Shares of Pandora were last seen down about 1% at $5.56, with a consensus analyst price target of $6.37 and a 52-week range of $4.09 to $10.90.

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