Trefis Reduces Price Estimate to $7.90 on Pandora on Cost Structure

Trefis lowers its price estimate on Pandora

to $7.90 as it believes the company's cost structure brings big downside risks. Goldman Sachs notes, "We have lowered our price estimate for Pandora to $7.90 given the significant increase in content acquisitionas well as sales and marketing costs in Q1 fiscal 2013. It must be noted that our current price estimate is hinged on our expectation that in future, Pandora will improve monetization and content and other costs will come down leveraging a higher subscriber base. If this does not happen, there could be further downside to our price estimate which is already at a significant discount of close to 25% to the market price." P closed at $10.69 on Friday.