It has been a rocky and turbulent time for Pandora Media Inc (NYSE:P) in the past few months. The company unveiled the a new on-demand streaming service, sourced for a buyer and finally settled for an investment deal with Sirius XM amounting to $480 million.
Currently, the company has introduced a plan to simply its operations and according to analysts, this is a short in the hand for investors. This is likely to see a jump in the company’s shares which have gone done by 35% in this year.
The company has appointed a new CEO who is expected to take over from September. According to Benjamin Swinburne, an analyst at Morgan Stanley, the company concentrates more on its core ad-supported radio business as opposed to the new distractions. He says that this shift in focus will finally see the company on the track of profitability.
According to Swinburne, the company has many options and opportunities to improve its business. He says that purchasing, managing and quantifying advertising campaigns on the company is very engaging and cumbersome in the current business environment. He adds that Pandora can increase its investment in tools that will help in simplifying the process of purchasing ads, which means that they can be bought by software-driven algorithms.
Swinburne adds that the company should also consider offering support to shorter ads saying it can allow it reach out to listeners more specifically in every hour without the need for additional time, a big portion of which is spent playing music. As many consumers shift to buying voice-controlled speaker like Amazon Echo, the company can reinvent itself and come up with more interesting and interactive means of advertising which are compatible with the new devices coming on market.
The company’s shares went up by 4% to trade at $8.43 during last Tuesday’s trading session and according to Swinburne, the shares can go up by over 40% to trade at $12.
To draw the big picture about the company, analysts have reiterated their confidence about the Pandora owing to the fact that the company has a new CEO. The CEO is likely to put alt of energy and focus on the company’s main business.