Is Pandora Immortal?

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio and balance sheet for Pandora are strong. This is an important factor. If the balance sheet remains strong and Pandora continues to creep toward profitability, then it will have potential as an acquisition target. On the other hand, bigger players in the market are choosing to compete with Pandora opposed to acquiring it.

Debt-To-Equity

Cash

Long-Term Debt

P

0.00

$80.50 Million

$0

SIRI

0.60

$520.94 Million

$2.44 Billion

AAPL

0.00

$39.82 Billion

$0

 

T = Technicals on the Stock Chart Are Mixed  

Pandora has performed well year-to-date. Over that timeframe, it has outperformed Sirius XM Radio and Apple. However, Pandora is down since its IPO. Of the three companies listed here, only Apple offers yield, which is currently 2.30 percent.

1 Month

Year-To-Date

1 Year

3 Year

P

9.30%

31.92%

-5.98%

N/A

SIRI

-1.29%

5.54%

41.18%

182.40%

AAPL

0.65%

-14.80%

-12.43%

128.00%

 

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At $12.11, Pandora is currently trading above all its averages.

50-Day   SMA

10.63

100-Day   SMA

9.71

200-Day   SMA

10.03

 

E = Earnings Have Been Improving           

There are two ways to look at this situation. The optimistic viewpoint is that earnings have been improving and seem to be heading toward positive territory. The pessimistic viewpoint is that the company is still losing money, and there is no guarantee that earnings will continue to improve.

2008

2009

2010

2011

2012

Revenue   ($)in   millions

N/A

19.33

55.19

137.76

274.34

Diluted   EPS ($)

N/A

-5.45

-3.84

-1.03

-0.19

 

When we look at the last quarter on a year-over-year basis, we see a significant increase in revenue and a slight increase in earnings.

10/2011

1/2012

4/2012

7/2012

10/2012

Revenue   ($)in   millions

75.01

81.33

80.78

101.27

120.00

Diluted   EPS ($)

0.00

0.46

-0.12

-0.03

0.01

 

Now let’s take a look at the next page for the Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?