Shares of Pandora Media Inc (NYSE:P) stock has been in focus after BMO Capital Markets revised its outlook on equities of the music streaming firm. Pandora’s attempt to grow non-music content is a major part of the firm’s attempt to reverse its share price drop. The stock has declined around 60% this year. Up until now, the company focus has been mainly on recorded music and has provided limited forms of different content. The company now intends to expand the content accessible and they anticipate this to accelerate next year.
Pandora issued financial report earlier this month, as the company’s active listeners dropped slightly more than projected. CEO Roger Lynch expressed that there lies no silver bullet which can solve these problems, focusing that investments in advertising would start to have bearing next year. BMO Capital Markets analyst said that Pandora’s transformations to its business model are being underappreciated.
He mentioned music industry executives who stated they are hopeful about the prospective growth of audio advertisements in 2018. Investors are overlooking the success of company’s subscription offerings. The streaming service recorded stronger revenue compared to both the firm and Wall Street projected in the previous quarter. As per the last update, Pandora Premium has over one million subscribers.
The firm posted earnings a couple of weeks earlier. Sales were up 8%, and the firm’s GAAP net loss reduced to $0.27 per share. However, both total listener and active listeners’ hours dropped by nearly 5% YoY, and Pandora management mentioned the reason to be difficult market conditions that prevented it from earning a profit. The company also missed analyst projections for sales growth. Moreover, management cautioned that sales for the fiscal fourth quarter will not meet analyst targets. Market is expecting Pandora to record sales of $413 million, a growth of 5% from the same period, a year ago.