This Is Good News for P Stock in 2017
Pandora Media Inc (NYSE:P) stock had quite a disappointing 2016. However, with the latest news about the company, it appears that there might be better days ahead in this new year, and some buoyancy may return to Pandora stock in 2017.
The Internet radio company announced on Thursday that it expects to exceed its fourth-quarter 2016 guidance on the back of increased subscriptions and advertising revenue. Moreover, the company has surpassed 4.3 million paid subscribers. The news pushed P stock higher by more than eight percent in pre-market trading.
CEO Tim Westergren said, “During the fourth quarter, we accelerated our core advertising business and saw strong improvements in adjusted EBITDA.” Westergren was confident that, now that the company’s strategy has been put in place, Pandora can expand its listener base, drive engagement, and deliver significant value to all the stakeholders. (Source: “Pandora Expects to Exceed Q4 2016 Guidance, Citing Subscription Momentum and RPM Growth,” Pandora Media Inc, January 12, 2017.)
Pandora had entered into direct deals with music labels and publishers and introduced “Pandora Plus” that included new features. By the end of December 2016, Pandora Plus had generated more than 375,000 net new subscribers.
The company is excited by the response to the enhancements on the service and believes that listeners will love “Pandora Premium,” to be introduced later this quarter. This is music to the ears of investors, and is likely to take P stock higher.
The company is also planning to cut jobs in the U.S. by about seven percent by the end of Q1, to bring down total operating costs in 2017. Reduction in costs will allow the company to invest more in product development and help in enhancing monetization, which will strengthen the foundation of its strategic investments.
Investors are looking forward to February 9, when Pandora will report its Q4 and full-year results,. The current optimism appears good for Pandora stock.