1-Star Stocks Poised to Plunge: Pandora?
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 (NYS: P) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Pandora's business and see what CAPS investors are saying about the stock right now.
Pandora facts
Headquarters (founded) | Oakland, Calif. (2000) |
Market Cap | $1.7 billion |
Industry | Broadcasting |
Trailing-12-Month Revenue | $338.4 million |
Management | Chairman/CEO Joseph Kennedy |
Trailing-12-Month Return on Equity | (33.4%) |
Cash/Debt | $82.3 million / $0 |
Competitors | CBS Radio |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 27% of the 33 members who have rated Pandora believe the stock will underperform the S&P 500 going forward.
Just last week, one of those Fools, TMFNoCeilings, succinctly summed up the bear case for our community:
Pandora makes an outstanding product ... nothing speaks more to that than its constantly growing listener base. Unfortunately, the economics of its business are just too ugly to ignore -- when you're spending almost 60% of your revenue just to pay for the songs that give you the opportunity to air the adds that earn you some revenue, it's never a pretty picture. Not to mention: revenue per thousand listening hours (RPM) is dropping fast thanks to the mobile switch, and there are more than a few deep-pocketed competitors ready to step in should Pandora finagle itself more attractive royalty fees at some point in the future. Again, love the service ... but not the stock.
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The article 1-Star Stocks Poised to Plunge: Pandora? originally appeared on Fool.com.
Brian D. Pacampara has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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