Monday, February 25, 2013

Why Pandora Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online radio company Pandora Media (NYSE: P  ) has received an alarming one-star ranking.

With that in mind, let's take a closer look at Pandora, and see what CAPS investors are saying about the stock right now.

Pandora facts

Headquarters (founded)

Oakland, Calif. (2000)

Market Cap

$2.1 billion

Industry

Broadcasting

Trailing-12-Month Revenue

$383.4 million

Management

Chairman/CEO Joseph Kennedy

Founder/Chief Strategy Officer Timothy Westergren

Trailing-12-Month Return on Equity

(29.9%)

Cash/Debt

$80.5 million / $0

Competitors

CBS Radio

Clear Channel Communications

SIRIUS XM Radio (NASDAQ: SIRI  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 65% of the 585 members who have rated Pandora believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, tshef, succinctly summed up the bear case for our community:

With the current Pandora model, the company will not be able to keep up with the multiple new options that are beginning to emerge. As Spotify continues to increase its presence in the music industry, and with the emergence of apps such as Tunein and iheartradio, I believe that Pandora is going to have trouble keeping up their revenue stream. With a price/book ratio of [22], the stock appears to be significantly overpriced.

Of course, that short pitch doesn't even come close to telling the entire story for Pandora. You're in luck, though. The Fool's brand-new premium report on Pandora looks at all sides of one of the most compelling tech plays in the market. You can grab your copy here, which comes with free updates for 12 months.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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