A new report by Morgan Stanley says, "Pandora has joined Netflix as one of the strongest content consumption platforms on the consumer Internet today.” Are they right?
The next Netflix. That’s what Morgan Stanley is calling Pandora.
Saying, “Pandora has joined Netflix as one of the strongest content consumption platforms on the consumer Internet today,” Morgan Stanley analysts Scott Devitt and John Egbert cite a comScore statistic showing Pandora third behind only Google and Facebook in usage with 4.3 billion hours in the last quarter. Devitt and Egbert believe shares will trade at $24 next year, 23.5% above its current price.
The Morgan Stanley analysts see a large jump in revenue for the company to $652 million in 2014, nearly 53% more than what’s expected for 2013. They also anticipate revenues of $1.3 billion two years after that.
Pandora’s stock has returned over 110% in the past six months but it’s nearly flat over the past two years. Meanwhile, its recent successes have stirred giants Google and Apple into responding with their own streaming music services. And it’s also up against Sirius XM Radio. Still, Pandora is the dominant player in the field with a 72% market share of Internet radio.
Should you tune into Pandora? We ask Talking Numbers contributors Enis Taner, Global Macro Editor at RiskReversal.com, and Richard Ross, Global Technical Strategist at Auerbach Grayson, to decide if you should press play on Pandora or if the only hits will be on your portfolio.
To see Taner and Ross analyze Pandora, watch the video above.
- Morgan Stanley