Wells Fargo Comments on Pandora (P) Feb. Metrics

March 6, 2014 11:04 AM EST
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Pandora (NYSE: P) reported February metrics on Thursday. Listener hours for Pandora during the month of February 2014 were 1.51 billion, an increase of 9% from 1.38 billion during the same period last year. Share of total U.S. radio listening for Pandora in February 2014 was 8.91%, an increase from 8.25% at the same time last year. Active listeners were 75.3 million at the end of February 2014, an increase of 11% from 67.7 million during the same time period last year.

Commenting on developments, analyst Peter Stabler of Wells Fargo noted softness is listener hours.

"We believe average hrs/listener is an important engagement metric, and this figure fell approximately 3% short of our estimate," said Stabler. 'Though we expect competitive threats to dominate headlines and sentiment in the near term, our investment thesis is unchanged."

"In Pandora we see a formidable challenger to terrestrial radio advertising and a franchise with a clear first mover advantage. Most recent audience data from Triton Digital (January) shows Pandora with a dominant 71 stream activation advantage over closest digital competitor Iheartradio.com, a gap Triton data suggests is not closing. Though Apple has reported high user counts of iTunes Radio, we believe the tight integration of the product with iTunes' core features may distort the actual level of user engagement, and we don't believe Apple poses a threat at the local advertising level due to the company's lack of an Android platform solution. Looking ahead, we expect Apple (and others) to remain a significant investor concern, but believe Pandora's monetization potential and competitive advertising position at the local level remain strong.," he added.

Wells Fargo has an Outperform rating on Pandora.

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 $39.43 yesterday.

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