In a report issued Friday, William Blair analyst Ralph Schackart provided an optimistic view on Pandora Media (P), following the company’s second-quarter earnings report. Schackart rates shares an Outperform and no price target was provided.
“Pandora’s shares are down, in part because of soft June user listening metrics, a slightly better-than-expected top line (investors looking for larger upside), and mobile RPM numbers slightly below consensus. Moreover, at this point of Pandora’s public life cycle, if all of its many operating metrics do not move in perfect lockstep, the stock can overreact, in our view, and this is likely what is occurring today. In addition, investors likely had high expectations going into the quarter and may have been looking for a larger full year 2014 estimate revision. A bright spot was local advertising revenue, which grew 144% year-over-year. Pandora’s local salesforce should season and continue to ramp up throughout the remainder of the year. This ramp-up combined with the integration of Strata and Mediaocean could provide continued upside to our model. Pandora bulls remain focused on $1.50 to $2.00 in EPS power and are assigning a 20-times P/E multiple, suggesting a $30-$40 stock price and an attractive risk/reward profile, in our view. We continue to believe Pandora will be an outperforming stock over the long term as Internet radio takes market share and Pandora captures more local advertising budgets”, Schackart wrote.
According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, 5-star analyst Ralph Schackart has a 29.1% average return and an 85% success rate. Schackart is ranked #182 out of 3222 analysts.