SunTrust Robinson Humphrey Cuts Price target Following Pandora's (P) 3Q Results
SunTrust Robinson Humphrey reiterated a Buy rating on Pandora (NYSE: P), and raised the price target to $18.00 (from $25.00), following the company's 3Q15 earnings results. Revenue at $312m missed consensus $313m. While management has largely dismissed competition previously, there was a notable about-face this quarter. EBITDA/EPS at $31m/$0.10 compares to consensus $29m/$0.10.
Analyst Robert Peck commented, "We are shocked by guidance implying monetization is hitting a wall (despite salesforce, pricing drivers). Our monetization thesis is impaired (we were already cautious on Hours). We maintain Buy solely on potential nearterm catalysts (CRB, conservative guide, direct deals), seeing no value downgrading here into the selloff ahead of these catalysts and at supportive valuation. Our PT goes to $18 from $25 based on 15x/2x 2017 EBITDA/revenue (vs 12%/67% markedly lowered revenue/EBITDA growth) plus $5 for cash, NOLs, and Ticketfly (private) [see page 4]. Cash EPS to $0.41/$0.72 from $0.69/$1.26."
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Shares of Pandora closed at $19.19 yesterday.