Better Buy: Netflix vs. Pandora

• Report this Comment On July 24, 2012, at 3:34 AM, orderartwork wrote:

  Which Pandora analyst should you believe?

  When Pandora IPO:

  Citigroup (C) analyst Mark Mahaney buy rating and $25 price target as a main underwriter on Pandora's IPO;

  It's also no surprise that fellow underwriters William Blair and Wells Fargo Securities also initiated coverage of Pandora on Monday with outperform ratings. Stifel Nicolaus, another underwriter on the initial public offering, started coverage today with a hold rating on Pandora.

  Similarly, IPO underwriter Morgan Stanley (MS) began coverage of Pandora with a hold rating with concerns about the company's path to profitability. Still, with a target price of $20, Morgan Stanley analysts are predicting some upside to the stock.

  This hasn't dissuaded JPMorgan (JPM) analyst Doug Anmuth from initiating the stock with an overweight rating and $22 price target, as he believes strong user growth will be followed by greater mobile monetization.

  Outside of Pandora's underwriters, the story is much different. The stock has a few other fans on Wall Street who rate it buy, but firms like Albert Fried & Co, Capstone Investments, and BTIG say investors should dump shares.

  BTIG analyst Richard Greenfield has a 12-month price target of $5.50, saying that while the company offers a "great consumer service," its business model "does not scale in the same way as other successful Internet businesses."

  Similarly, Albert Fried research director Rich Tullo praises Pandora as a great service, but notes that "great companies do not always offer attractive returns for equity investors. We have concerns about Pandora's financial statements in the near term and its long-term ability to monetize its user base." Tullo has a sell rating.

  Capstone Investments analyst Paul Meeks is also bearish with a sell rating. Meeks says "it's an Internet shell game," arguing that management, underwriters and Pandora bulls stay focused on the growth of users and listener hours while ignoring profits and cash flow.

  That shouldn't come as a surprise for a company struggling with the same problems Internet companies have struggled with for more than a decade: Will user growth lead to more revenue, and can that revenue be turned into profit?

• Report this Comment On July 24, 2012, at 4:30 AM, orderartwork wrote:

  As famous Pandora pumper Rocco Pendola, I hope Rocco Pendola had added more now since you told us you add many shares when p was $10.4, which he was think it was his life time opportunity. Now it is under $10 now, I suggest you should add more though I belive it will be under $5 soon.

Add your comment.