Pandora (P) PT Raised to $8 at MKM Partners
MKM Partners raised its price target on Pandora (NYSE: P) to $8.00 (from $6.25) while maintaining a Neutral rating following results.
Analyst Rob Sanderson commented, "P reported a ($34mn) EBITDA loss, modestly better than consensus. Revenue growth of 11% was better than the 7% consensus. While users continue to decline, we think there are at least four dynamics that can have relatively large impact on the model, but where management seems to have either little visibility or control over: (i) subs vs. ad-supported mix; (ii) impact of marketing reallocation on user growth; (iii) content costs and minimum guarantees; and (iv) publisher participation and demand for audio programmatic. We are making revisions to our estimates, but need a more substantial model rebuild to better understand the sensitivities and valuation implications around these dynamics. We are, however, raising our fair value estimate to $8.00 (from $6.25 previous), now 1.4x EV to 2019 sales from 1.2x previous."