Pandora (P) PT Lowered to $14 at Credit Suisse
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here.
Credit Suisse analyst Stephen Ju lowered his price target on Neutral-rated Pandora (NYSE: P) to $14.00 (from $16.00) after previewing Q3 and updated their model on the company's new business.
Ju commented, ": As Pandora embarks on a new chapter of its growth, we weigh in with a clean, rebuilt model which layers in the new on-demand product and also allows for sensitivity analysis based on the conversion of free ad-supported users to paying subscribers. Given the higher expected LPMs as it signed direct deals with the record labels, our 2017 Adj. EBITDA estimates come down significantly to a loss of $86mm (vs. prior profit of $68mm). And between royalties to the labels as well as platform fees, we do not believe on-demand will contribute meaningfully to the bottom line until the platform fees move to ~15% starting in 2018. Hence it looks like 2017 will be a period of investment, and as the new $5 subscription product Pandora Plus was launched mid-September, the higher LPM also applies to 4Q16 as well, and we expect Pandora to decrease its 2016 profit guidance as a result."
Shares of Pandora closed at $12.83 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: Oppenheimer Upgrades Pandora (P) to Outperform
- Credit Suisse Upgrades Juniper Networks (JNPR) to Outperform
- Deutsche Bank Downgrades MGM Growth Properties (MGP) to Hold
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Analyst PT Change
Related EntitiesCredit Suisse
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!