NEW YORK (TheStreet) -- Shares of Pandora Media Inc. (P) are higher by 3.75% to $27.08 in mid-morning trading on Thursday, after the company announced it has signed a multi-year licensing agreement with the music rights management company BMG.
The agreement gives Pandora access to the company's full BMI and ASCAP catalog of music, expanding the music streaming service's library of songs, which has been described as limited when compared to competitors.
Pandora said that the deal creates marketing and business benefits for Pandora, BMG, and the songwriters it represents.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Artists BMG represents include: Adele, Beyonce, David Bowe, Rihanna, the music of the late Frank Sinatra, and more.
Separately, 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, 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 50.6% when compared to the same quarter one year ago, falling from -$7.79 million to -$11.73 million.
- Net operating cash flow has significantly decreased to -$7.13 million or 207.46% 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 50.0% 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 -$0.30 versus -$0.19 in the prior year. This year, the market expects an improvement in earnings ($0.18 versus -$0.30).
- 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.
- 44.41% 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 -5.35% is in-line with the industry average.
- You can view the full analysis from the report here: P Ratings Report
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