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 (NYSE: 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 $2.0 billion
Industry Broadcasting
Trailing-12-Month Revenue $304.1 million
Management Chairman/CEO Joseph Kennedy
CFO Steven Cakebread
Trailing-12-Month Return on Equity (57.6%)
Cash/Debt $80.6 million / $0
Competitors CBS Radio
Clear Channel Communications
Sirius XM Radio

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

On CAPS, 67% of the 552 members who have rated Pandora believe the stock will underperform the S&P 500 going forward.

Earlier this week, one of those Fools, BCNMatador, touched on the competitive headwinds working against the stock:

I love Pandora, the service, but I'm not so sure about the stock. In particular, I'm worried about Amazon and Apple's cloud service for storing music and other streaming services like Spotify. I also don't see the record labels doing much to promote growth in music streaming. Until they embrace this as the new way of doing business, I'll be staying away from [Pandora].

I will say that I love Pandora for music discovery and I hope they are around for a very long time.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Amazon and Apple. Motley Fool newsletter services have recommended buying shares of Amazon and Apple. 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 Fool's disclosure policy always gets a perfect score.


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