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Why Pandora Stock Fell in November

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P stock falls ~30% in November

Music streaming firm Pandora (P) saw its stock fall ~30% last month, closing at $5.00 on November 30, 2017. Pandora is now trading 12.6% above its 52-week low of $4.44 and 65% below its 52-week high of $14.10. The stock has fallen 57% in the trailing-12-month period and 6.2% in the past five days.

The stock fell 29% on November 3, 2017, after the firm announced a weak revenue forecast for 4Q17. Pandora announced that it expects revenue between $365 million and $380 million in 4Q17, which would mean a YoY (year-over-year) fall of 3%–7%, compared with its revenues of $393 million in 4Q16.

Average revenue estimates fell to $375 million

While analysts had earlier estimated that the firm would post revenues of $412 million in 4Q17, they have now revised their average estimates to $375 million. Pandora attributed this revenue decline to challenging market conditions that could negatively impact its advertising revenues.

Pandora’s management said that its 4Q17 guidance for revenue includes subscription growth, though that will likely be offset by falling advertising revenues. In 3Q17, Pandora’s revenues rose 7.6% YoY to $351.9 million.

Analysts expect the firm’s revenues to rise 4.4% YoY in fiscal 2017 to $1.45 billion, 2.5% YoY to $323.87 million in 1Q18, and 8.8% YoY to $1.57 billion in fiscal 2018.

Notably, Pandora has a market capitalization of $1.2 billion. Peer companies include tech giants such as Apple (AAPL), Netflix (NFLX), and Amazon.com (AMZN), which have market caps of $882 billion, $81 billion, and $567 billion, respectively.

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