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