Pandora Media (NYSE:P) shares are among the most significant laggards over the last three years, with widening losses. Pandora shares dipped 54% in the previous year alone, down 85% from all-time high of $40 it hit in early 2014. Its stock trades around a 52-week low of $5 at present – with the market capitalization of $1.3 billion.
Its shares, however, are on the verge of a major rebound in analysts view, amid upbeat results and AdsWizz acquisition for $145 million.
Piper Jaffray believes improved monetization and relationship with Sirius XM are the catalysts for its share price appreciation. The firm has set the price target of $9 for Pandora stock.
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Pandora Media posted year over year revenue growth of 7% to $395 million in Q4, supported by strong growth in Ad RPM and subscription revenue. Its Ad RPM revenue landed at an all-time high of $75.65, and subscription revenue soared 63% to $97.7 million. Its total revenue of $1.467 billion in fiscal 2017 jumped 6% from the past year.
The company has also successfully narrowed its loss to $45 million in Q4 from $90 million in the year-ago period.
Pandora Media recently announced to AdsWizz for $145M, which will allow it to create the largest digital audio advertising ecosystem in the world. Raymond James upgraded its rating to strong buy with the price target of $8 after AdsWizz acquisition. “The deal is of a piece with Google’s strategy when it bought DoubleClick,” analyst Justin Patterson says.
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Besides from acquisition, Pandora has also been working on organizational restructuring to redesign its portfolio and optimize business performance. The restructuring will result in annualized savings of close to $45 million to adjusted EBITDA, which the company is planning to reinvest in growth opportunities to strengthen its revenue base.
“From launching on-demand for our ad-supported listeners to expanding multiple device partnerships in the last quarter alone, we’re building a strong foundation for audience growth and improved monetization,” says CEO Roger Lynch.
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