Wells Fargo Comments on Pandora (P), Sees Upside Due to No Competition
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Up: 13 | Down: 14 | New: 11
Rating Summary:
10 Buy, 24 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wells Fargo is reaffirming its Outperform rating and $21-$23 valuation range shares of Pandora (NYSE: P) following its second quarter results.
The company reported its second quarter results with $67 million in revenue and EPS of $0.02, both estimates topped the firms estimates of $60.3 million and breakeven. The firm reports that the revenue upside was larger due to much better monetization and increased subscriber revenue as total listening hours were in line with their expectations.
The firm believes that total mobile listening hours will be in the mid 60's percent range in the third quarter as people come back from vacation and kids go back to school, aka vegetate in-front of their computer. Wells sees RPM increasing nicely as a result. In the second quarter total mobile listening hours equaled 70 percent of the total hours, while still being able to achieve a RPM of $33.75, ahead of the firm's $33.27 estimate.
Pandora's third quarter guidance calls for EPS in the range of breakeven to a loss of $0.02 and revenue in the range of $69.5 million and $72.5 million.
For the third quarter, Wells Fargo cut its EPS estimate from $0.01 to ($0.01) as they plan to hire more sales representatives. The firm raised its revenue estimate from $64 million to $70.2 million. Theses estimates are based on total listener hours of 2 billion, RPM of $35.20, and CAC per 1,000 hours of $20.
An analyst at Wells Fargo comments, "We believe the company has demonstrated its ability to drive revenue growth, and think we are at the beginning of monetization improvement on its path to profitability. As new competition has not seemed to hinder growth, we believe that the stock is poised for a rebound."
For more ratings news on Pandora click here and for the rating history of Pandora click here.
Shares of Pandora closed at $12.47 yesterday.
The company reported its second quarter results with $67 million in revenue and EPS of $0.02, both estimates topped the firms estimates of $60.3 million and breakeven. The firm reports that the revenue upside was larger due to much better monetization and increased subscriber revenue as total listening hours were in line with their expectations.
The firm believes that total mobile listening hours will be in the mid 60's percent range in the third quarter as people come back from vacation and kids go back to school, aka vegetate in-front of their computer. Wells sees RPM increasing nicely as a result. In the second quarter total mobile listening hours equaled 70 percent of the total hours, while still being able to achieve a RPM of $33.75, ahead of the firm's $33.27 estimate.
Pandora's third quarter guidance calls for EPS in the range of breakeven to a loss of $0.02 and revenue in the range of $69.5 million and $72.5 million.
For the third quarter, Wells Fargo cut its EPS estimate from $0.01 to ($0.01) as they plan to hire more sales representatives. The firm raised its revenue estimate from $64 million to $70.2 million. Theses estimates are based on total listener hours of 2 billion, RPM of $35.20, and CAC per 1,000 hours of $20.
An analyst at Wells Fargo comments, "We believe the company has demonstrated its ability to drive revenue growth, and think we are at the beginning of monetization improvement on its path to profitability. As new competition has not seemed to hinder growth, we believe that the stock is poised for a rebound."
For more ratings news on Pandora click here and for the rating history of Pandora click here.
Shares of Pandora closed at $12.47 yesterday.
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