NEW YORK (TheStreet) -- Pandora Media (P) shares fell 8.4% to $24.08, as of 3:10 p.m. New York time. The company has traded between $23.90 and $26.10, after opening the day at $25.98. The company is lagging the S&P 500 which is down 1.01%.
Pandora Media, along with other momentum stocks this year, plunged as investor worries over the current political uncertainty in Washington plagued the market.
Stretching into its eighth day, the government shutdown is a result of deadlock among Congressional leaders to agree on a new budget. Investors are also concerned the government will default on its debt obligations if it fails to raise the debt ceiling by the soft deadline of October 17.
"Many of the recent winners are breaking key levels," said 'Real Money' contributor James 'Rev Shark' DePorre in his analysis Tuesday. "It is very likely that many of these stocks will bounce back sharply at the first hint of some sort of Washington deal."
TheStreet Ratings team rates Pandora Media Inc as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate Pandora Media Inc (P) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 (4 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
Written by Keris Alison Lahiff.