Boston, MA 04/07/2014 (wallstreetpr) – Pandora Media Inc (NYSE:P) provides Internet radio services which are available free to listeners, but funded by ads. Apple Inc (NASDAQ:AAPL) also started a similar service about seven months ago.
Investors in Pandora were worried by the Apple Inc’s launch of iTunes Radio, given that competing against Apple Inc was expected to be a tall order for Pandora. But if the latest data is anything to go by, Pandora is successfully holding off Apple Inc in the Internet radio service business. Instead of its listener metrics going down since Apple Inc launched iTunes Radio, the company is witnessing overwhelming increase in active listener count and listener hours.
In March this year, listener hours at Pandora stood at 1.71 billion, up 14 percent from March 2013 numbers. Sequentially listener hours were up 13 percent. The company’s active listeners were 75.3 million, 8 percent increase from March of 2013. Currently the company commands 9.1 percent U.S. radio listener market share, which is 8 percent improvement from a year ago.
While Apple Inc has not released its recent figures to rival those of Pandora, it is clear that so far iTunes Radio has not complicated the business for Pandora.
Intense competition
As much as Pandora Media Inc (NYSE:P) is expanding its listener count and hours, these gains are coming at a big financial cost to the company. The company is spending a lot to capture more listeners. It is also spending heavily in terms of royalty to recording companies so that it can provide quality music service to its audience. Pandora is going to all these lengths due to the intense competition which it faces, such that without these heavy spending, it can be difficult to keep up with competition.
The company is facing competition from iHeart Radio, Apple Inc, Google and Beats Music, just to mention a few.
Investment opportunity
Pandora Media Inc (NYSE:P) has come from along in this business. The company has moved from making losses to profitability. Analysts at JP Morgan recommend buy for the stock. They have $41 price target on the stock. Pandora stock has a lifetime high of $40.44, achieved March 5. To sum up the story, Pandora Media Inc (NYSE:P) looks like an attractive investment opportunity given its decent stock price momentum and profitability.
The company announced that it will discontinue monthly update of its listener metrics, but will continue to provide such data in quarterly basis.
