According to seekingalphia.com, the key worry is Pandora’s count of active listeners, which grew 8% YTD to 75.3M in Q1, but that isn’t strong enough for some analysts, who worry that newer services, such as Apple's iRadio, Spotify and others, could pressure growth in the future (Q1 results).
Fried thinks the growing competition and high costs will continue to crimp Pandora’s bottom line and ultimately weigh on the stock price, whose target he cuts to $20 from $23.
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Other analysts are not as pessimistic, according to Seeking Alpha.
Pandora is now available in all 10 of the bestselling passenger vehicles, with 5M new activations in Q1, notes Needham's Laura Martin, reiterating a Buy rating and $41 price target and sharing her key takeaways from the earnings call. "We estimate that P has a 5 year head start over other ad-driven streaming services."
Mobile ad revenue of $103M increased 59% YTD, driven by rising audio ads, say Cowen's John Blackledge, maintaining his Outperform and $41 price target. Mobile advertising was slightly ahead of his team's forecast. "As in-car listening hours ramp Pandora is likely to air more in-car audio ads than on other devices to offset the inability to offer video/display ads."
Another area of concern, the company's active users continues to plateau. Among a sea of improving metrics active users continues to slow, possibly even regress.
These numbers haven't exactly been scorching to the upside since November of last year.
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