NEW YORK (TheStreet) -- Shares of Pandora Media (P) were declining 7.72% to $11.24 on heavy trading volume early Wednesday afternoon after the company posted weaker-than-anticipated 2016 third quarter results and issued a downbeat revenue outlook.
After yesterday's closing bell, the Oakland, CA-based music streaming company reported an adjusted loss of 7 cents per share on revenue of $351.9 million. Analysts were looking for a loss of 6 cents per share on revenue of $366.2 million.
For the fourth quarter, the company expects revenue in the range of $362 million to $374 million vs. analysts' projections of $392 million.
For the fiscal year, Pandora estimates revenue between $1.35 billion and $1.37 billion, compared to the company's prior outlook of $1.39 billion to $1.41 billion. Wall Street anticipates revenue of $1.40 billion for 2016.
Albert Fried cut its rating on the shares by two notches to "underweight" from "overweight" with an $8 price target earlier today.
Costs are set to rise and the company's recent deals with record companies like Warner Music, Sony Music (SNE), Vivendi's (VIVHY) Universal Music and Merlin Network are "abominable," the firm said, the Fly reports.
FBR Capital also downgraded Pandora stock, to "market perform" from "outperform," following yesterday's results and lowered its price target to $12 from $16.
The firm is concerned with Pandora's "troubling combination of ad slowdown and guidance for higher spending," according to the Fly.
More than 10.72 million shares of Pandora have traded hands so far today vs. the 30-day average of 5.52 million.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "sell" with a ratings score of D.
The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: P