Pandora Media may have beat earnings estimates, but the streaming radio provider’s shares have reversed the upward action they saw following last week’s strong earnings report. Interestingly, Canaccord Genuity analysts raised their price target last week after that report.
Troubling technicals for Pandora Media
According to The Street, Trade Ideas LLC identified Pandora Media as showing signs of a “perilous reversal,” which basically just means that they soared on day but plunged the next day. The stock tumbled 7.7% to $9.16 per share on Monday after skyrocketing on Friday due to Thursday night’s strong earnings report. The stock now is trading at a lower level than where it was on Thursday before that earnings report.
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The day’s trade volume is also extremely high. As of 3:04 p.m., more than 11.62 million shares had changed hands, compared to the average daily volume of 9.65 million.
Pandora Media’s earnings were strong
Canaccord Genuity analyst Michael Graham and team raised their price target on Pandora Media from $13 to $14 per share and reiterated their Buy rating in a report dated April 28. They noted that listener hours grew 4%, a reacceleration from the previous growth rate of 3% and higher than their 2% forecast. Also hours per listener per mount grew from 22 in the year-ago quarter to 22.9 in the first quarter, while ad RPM increased from $38 to $45 while management increased their guidance by about 1%.
Pandora said the one-month rolling listener base decline sequentially to 79.4 million, but that was an increase from the year-ago quarter’s 79.3 million. Further, the three-month rolling listener base is about 100 million, and the Canaccord Genuity team believes these roughly 20 million listeners will keep being “an attractive target for creative reengagement campaigns.”
The company’s Ticketfly segment also showed strong growth with a 20% increase in gross ticket value and a 13% take rate for a total of $22.3 million revenue.
More TV advertising
Pandora Media management also said on the earnings call last week that they will increase their TV advertising, which they have already done recently, Graham noted. Also upon returning to the helm, CEO Tim Westergren set forth a plan for a new music marketplace that will allow artists to “earn a living by connecting with fans more efficiently, even if smaller groups,” the analyst explained.