Trade-Ideas LLC identified

Pandora Media

(

P

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Pandora Media as such a stock due to the following factors:

  • P has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $150.9 million.
  • P has traded 1.4 million shares today.
  • P is down 3.2% today.
  • P was up 5.2% yesterday.

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More details on P:

Pandora Media, Inc. provides Internet radio services in the United States. The company allows listeners to create up to 100 personalized stations to access free music and comedy catalogs, as well as offers Pandora One, a paid subscription service to listeners. Currently there are 13 analysts that rate Pandora Media a buy, 1 analyst rates it a sell, and 13 rate it a hold.

TST Recommends

The average volume for Pandora Media has been 6.2 million shares per day over the past 30 days. Pandora Media has a market cap of $2.6 billion and is part of the services sector and media industry. The stock has a beta of 0.75 and a short float of 14.4% with 2.30 days to cover. Shares are down 30.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Pandora Media as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • 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 4143.4% when compared to the same quarter one year ago, falling from -$2.03 million to -$85.93 million.
  • The share price of PANDORA MEDIA INC has not done very well: it is down 15.50% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • PANDORA MEDIA INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This year, the market expects an improvement in earnings ($0.19 versus -$0.15).
  • 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.
  • The gross profit margin for PANDORA MEDIA INC is rather high; currently it is at 53.47%. 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 -27.58% is in-line with the industry average.

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