During Tuesday trading, Pandora shares gained 3.5% to $28.09, while Sirius shares were flat at $3.71, compared to the S&P 500's 0.32% fall. Year to date, Sirius has gained 28% and Pandora has risen 206.3%.
By early afternoon, Sirius was the second most actively traded stock after Facebook (FB), with 42.23 million shares having changed hands, compared to Pandora's 5.28 million trading volume.
TheStreet Ratings Team has this to say about their SiriusXM recommendation:"We rate SiriusXM Radio INC (SIRI) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.1%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Net operating cash flow has increased to $302.24 million or 37.49% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 7.90%.
- The gross profit margin for SiriusXM Radio INC is rather high; currently it is at 65.01%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.54% trails the industry average.
- Compared to its closing price of one year ago, SIRI's share price has jumped by 31.38%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- SiriusXM Radio reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SiriusXM Radio INC increased its bottom line by earning 53 cents a share versus 7 cents a share in the prior year. For the next year, the market is expecting a contraction of 86.8% in earnings (7 cents vs. 53 cents).
- You can view the full analysis from the report here: SIRI Ratings Report
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 43.8% when compared to the same quarter one year ago, falling from -$5.42 million to -$7.79 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, Pandora Media Inc's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$2.32 million or 181.48% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Pandora Media Inc's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, Pandora Media Inc reported poor results of -23 cents a share vs. -10 cents a share in the prior year. This year, the market expects an improvement in earnings (3 cents vs. -23 cents).
- 42.71% is the gross profit margin for Pandora Media Inc which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -4.94% is in-line with the industry average.
- You can view the full analysis from the report here: P Ratings Report
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