Goldman analysts wrote that the stock could double if the streaming radio giant can double its average advertising total, increase local advertising proportion to 50% and leverage its fixed financial costs. Other analysts had predicted an 8% chance that Pandora could surpass $60, but Goldman reports that the chances are significantly higher than that.
"We believe the mix-shift to local advertising from national advertising as well as the increase in ads per hour are likely to boost revenue far beyond the expected annual listener hour growth of 25% from 2013 to 2016," the report states. "If local advertising rises to 50% of total (from 16%) and the ad load rises to four minutes per hour (from two), 2016 revenue could be 400% higher than in 2013."
The stock had a volume of 7.5 million before noon on Thursday, and its average volume is 8,700,780.
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 multiple 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."