Pandora (P) Cut Down as 'New Media' Dollars Get Axed

December 5, 2012 8:39 AM EST
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Price: $13.40 +1.13%

Rating Summary:
    21 Buy, 22 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 22 | Down: 16 | New: 11
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Shares of Pandora Media (NYSE: P) were slammed yesterday evening after it released its Q3 earnings report. While revenue was above Street estimates, Pandora guided full year revenues below street estimates, citing fiscal cliff worries. This caused jittery investors to dump shares of Pandora, resulting in a roughly 16 percent decline.

Commenting on the developments, analysts Brian Nowak of Nomura said "This is something to monitor, as Pandora is the first ad company we have heard take such a cautious tone about 2013. That said, if the ad environment is weakening, we would expect 'experimental' ad dollars on new media (like Pandora) to be among the first cut."

Nowak called the extent of the guide-down surprising and said it raised risk of slower-than-expected near-term advertiser adoption.

Looking forward, Nowak expressed concerns about secular threats (like a potential streaming product from Apple) as well as expectations for the pace at which Pandora will be able to take share within the local radio market.

Nomura Securities maintained a Reduce rating on Pandora (NYSE: P) and cut its price target to $5.00 (from $7.00).

For an analyst ratings summary and ratings history on Pandora click here. For more ratings news on Pandora click here.

Shares of Pandora closed at $9.45 yesterday.

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