Pandora Still Sweet Music At Barrington Research

Jeff Houston of Barrington Research was out with a note Tuesday morning with his take on the recent earnings release from Pandora Media Inc P. He maintained his Outperform rating and $28 price target.

Some of his key comments are noted below.

• "'Pandora reported Q3/14 results on Thursday, October 23, after the market close. Revenue and EPS exceeded expectations and management raised guidance. The strong performance was driven by accelerated listener engagement, mobile monetization, and business-model leverage."
• "However, the stock declined 14% on Friday because Q3/14 active listeners of 76.5 million were flat sequentially, albeit up 5% YOY."
• "With about a third of the U.S. population tuning in every month, it is not surprising that growth will be driven by continued improvement in user monetization through increasing spot loads and user engagement. In Q3/14, engagement (measured by hours per active user) advanced 18% YOY to 21.6—listeners use Pandora about 10 days per month, on average, up 3/4s of a day YOY. We do not anticipate significant near-term growth in listeners until Pandora expands further internationally."

Shares of Pandora were trading slightly higher at $19.42 in the premarket.