The internet radio provider was enjoying a rally after announcing December audience metrics which signaled a successful contest to Apple-owned (AAPL) iTunes Radio which was expected to dominate the industry when it was launched last year.
For December 2013, Pandora tallied a total 1.58 billion hours, a 6% month-on-month increase and up 13% from the same month a year earlier.
The Oakland, Calif.-based business saw its share of total U.S. radio listening increase to 8.6% from 7.58% a year earlier. Active listeners came in at 76.2 million, 13% higher than the year-ago period.
TheStreet Ratings team rates PANDORA MEDIA INC as a Sell with a ratings score of D. The team has this to say about their recommendation:
"We rate PANDORA MEDIA INC (P) a SELL. This is driven by a few notable weaknesses, 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 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 182.8% when compared to the same quarter one year ago, falling from $2.05 million to -$1.70 million.
- 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. 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 -$0.23 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.02 versus -$0.23).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength 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.
- 46.70% 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 -0.94% is in-line with the industry average.
- Net operating cash flow has significantly increased by 569.24% to $4.12 million when compared to the same quarter last year. In addition, PANDORA MEDIA INC has also vastly surpassed the industry average cash flow growth rate of 23.71%.
- You can view the full analysis from the report here: P Ratings Report