Pandora (P), the leading internet radio service, announced its October 2013 audience metrics Tuesday. Listener hours advanced 18%, share of total US radio listening jumped 145 basis points, while active listeners increased 20% for the month on a year-over-year basis. On a sequential monthly basis, listening hours advanced 8%, share of total US radio listening increased 29 basis points, while listeners fell modestly. Though Apple (AAPL) may be impacting listener expansion to a degree with its iTunes Radio product, the market share performance at Pandora was solid, and expectations regarding the demise of Pandora due to Apple’s entrance may be a bit overblown at present. Still, Apple is a considerable long-term threat, with near unlimited financial resources.
Valuentum’s Take
In its most recent second-quarter performance (three months ended July), Pandora continues to post GAAP net losses, and only by excluding stock-based compensation (a real economic expense) does the firm post anything resembling a profit (see image below). We continue to believe shares of Pandora are overpriced (at the time of this writing) as competitive threats intensify, and you won’t see us adding the company to our Best Ideas portfolio anytime soon. Pandora plans to release fiscal third quarter results November 21.
Image Source: Pandora