At a current price of $8.61 and market cap of under $1.5 billion, Pandora Media (P) is firmly in small cap territory. But thats a disappointing situation for a company that reached $20 a share not long after last years IPO.
Keep in mind, Pandora is an internet/social media company. And theres typically a lot of excitement around that type of company (Facebook anyone?).
But it doesnt seem the buzz is enough to keep Pandora at a sustainable high price for the time being.
Heres the thing
Despite the high expectations and poor performance, Pandora is worth a second look.
First off, youd think Pandora was showing negative growth or something with how much the stock has fallen. But thats hardly the case.
In fact, just recently, the company reported stellar March numbers. March listener hours were up 88% year over year. Active listeners increased 59%. And most impressively, the companys radio share jumped from 3% to 5.8%.
Thats a huge jump in radio share. Keep in mind, radio share includes standard radio listeners, satellite radio, and online streaming music like Pandora.
And thats not all
Pandora just announced a new program that I think is extremely innovative. Its called Inside the Music and its presented by Intel (INTC).
In a nutshell, the program offers a behind the scenes look at Pandoras music selection process. Plus, it will allow listeners to pick music based on specific features such as guitar effects, harmonic structure, and vocal harmony.
But whats really important is that the program is targeting 18-34 year olds who are often the most active users of Pandoras features.
Heres what I like
Management is wisely targeting the group of people who are most likely to spend money on Pandoras services. They arent trying to do too much right now. Theyre focusing on the right audience the one thatll generate revenue.
Even more significant, this program is presented through a partnership with Intel.
Look, Intel doesnt put their name on just anything. Their reputation is at stake with any sort of advertising campaign or partnership.
Whats more, the Intel brand name is often associated with innovation. And, innovation is exactly what Pandora is achieving with their new program. Theres nothing like it out there. Of course, it doesnt hurt that its being supported by a powerhouse company.
Bottom line Pandora may be underperforming in terms of stock price, but the company is hardly in bad shape. Their listener numbers are improving substantially. And, the company is starting a bold, innovative program with Intel.
It may not happen overnight, but I think Pandora is set for a climb. And at the current price, it could make a nice addition to your portfolio.
Editors Note: Today’s the day Im releasing my pick to subscribers in my flagship penny stock service Penny Stock All-Stars. Dont miss out on your chance to grab shares in this remarkable company that could be the next powerhouse in the industrial electrical equipment industry. Click here for more information about this exciting service.
Yours in profit,
Category: Internet Stocks