Pandora stock fell over 9.5% last week
Music streaming site Pandora (P) fell 9.6% in the week ended December 22, 2017, to close at $4.69. The stock is currently trading 5.6% above its 52-week low of $4.44 and 66% below its 52-week high of $13.72. Pandora has had a difficult 12-month period, as the firm’s stock has fallen almost 65%.
Investors are concerned about Pandora’s business model, as the company has seen a decline in its profitability and slowing advertising revenue. Pandora attributed lower advertising revenue to challenging market conditions.
The stock fell approximately 30% in November 2017 after the company announced a weak revenue forecast for 4Q17. Pandora’s management expects revenue between $365 million and $380 million in 4Q17, a YoY (year-over-year) fall between 3% and 7%. In 4Q16, Pandora reported revenue of $392.6 million.
Revenue growth of 4.5% expected in fiscal 2017
Analysts expect Pandora to post revenue of $374.6 million in 4Q17, which is lower than the earlier estimates of $412 million in 4Q17. Analysts expect the firm’s revenues to rise 4.5% YoY in fiscal 2017 to $1.5 billion, 2% YoY to $322.4 million in 1Q18, and 8.4% YoY to $1.57 billion in fiscal 2018.
Analysts expect Pandora’s profitability to fall as well in fiscal 2017. Analysts have estimated a YoY fall in EPS (earnings per share) from -$0.51 in fiscal 2016 to -$0.58 in fiscal 2017. However, EPS could rise in 4Q17 to -$0.07 from -$0.13 in 4Q16.