Cowen Affirms Pandora (P) at 'Outperform' Following Q2 Results; Mobile Growth Accelerating

Cowen and Company affirms Pandora (NYSE: P) with an Outperform rating and $23 price target following the company's Q2 results issued Thursday night.

Analyst John Blackledge summarized: [Pandora] reported solid 2Q15 financial results as revenue and EBITDA topped street estimates and were above the high-end of guide, driven by accelerating mobile growth and strong local growth due to all time high RPMs, despite slightly lower listener hours. Management raised FY rev. guide slightly and maintained EBITDA guide due to marketing spend ramp in 2H.

Blackledge highlighted the following key operating points: Active listeners were 79.4MM (+4% y/y, +0.3% q/q), slightly below our forecast of 79.5MM and below consensus of 80.3MM. Listener hours totaled 5.3BN, +5% y/y, below our 5.5BN estimate, largely due to positive adjustments to P's playlist technology which resulted in fewer song skips. User hours/user/month grew to 22.3, +1% y/y. Monetization reached all time highs as Ad RPMs (ad monetization/hour) were ~$50, up 25% y/y, driven by mobile Ad RPMS of ~$46 (+28% y/y), and desktop of ~$74 (+19% y/y).

Blackledge's Q3 revenue estimate moves from $314 million up to $317 million, while the analyst's FY15 revenue outlook increases slightly from $1.19 billion to $1.2 billion.

For an analyst ratings summary and ratings history on Pandora click here. For more ratings news on Pandora click here.

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