Pandora's Bounce Back Doesn't Win Over Barrington Analysts

Pandora Media Inc (NYSE: P) recently said it was working on new revenue generation opportunities, although these would bring added costs. Having said this, some of its new services might help it reduce churn, while opening new monetization paths.

However, in a recent report, Barrington Research analysts James Goss and Patrick Sholl noted that, while these expansions to the company’s business “may well add to its potential, such ventures are never totally guaranteed, and in this case include incurrence of additional costs including exposure to higher royalty demands that will combine to set back profit projections.”

The immediate impact that these transformational efforts will have on Pandora’s costs and profitability, coupled with the rebound seen in the stock price since the beginning of December – which has situated it close to Barrington’s target price, led these analysts to reduce their rating on the shares to Market Perform.

The firm is now projecting a net loss of ($0.35) per share for 2016, and ($0.20) per share for 2017, down from EPS of $0.09 in 2015.