RBC Capital Reiterates Outperform Rating On Pandora Media Inc Ahead Of Investor Day

RBC Capital analyst Mark Mahaney came out today with his views on Pandora Media Inc (NYSE:P), as the company will host an Investor day on Thursday March 5 at 2:00pm PT in San Francisco. The analyst reiterated an Outperform rating on the stock, with a $25 price target, which implies an upside of 69% from current levels.

Mahaney observed, “Pandora is trading off about 17% YTD, largely due to the weaker than expected guidance and slower Listener Hour growth on the Q4 EPS report. However, we believe our fundamental long-term thesis remains unchanged (tho challenged), and we continue to see Pandora executing well (continued RPM growth & Content Cost leverage) despite the presence of an increasingly strong competitive set (incl. Spotify). The building out of the local ad salesforce, continued integration into mainstream radio ad-buying platforms and increasing marketing spend will all combined to continue growing Mobile monetization and consumer usage, which should give Pandora leverage against a very high, fixed-cost licensing structure. We still see Pandora as a clear derivative play off of the Internet-Connected Car. Further, we view Pandora as having significant strategic value and we continue to view the risk/reward on P shares as highly asymmetrical.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Mahaney has a total average return of 23.2% and a 69.0% success rate. Mahaney has a -14.6% average return when recommending P, and is ranked #13 out of 3492 analysts.

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