Detwiler: Pandora Looking Less Attractive

Pandora Media Inc P has lost some of its luster, according to Detwiler Fenton analyst Alex Arnold.

"As Pandora looks to pivot, doors may be shutting too quickly," the analyst began.

The tale of Pandora's tape has been volatile since the company went public in 2011. Pandora is down 20.52 percent over the past five years, down 29.2 percent of the past one and down 20.58 percent year-to-date.

Lingering Concerns

Citing previous hesitations toward the company, Arnold reiterated that without the resolution of those previous concerns, the issue "is looking less attractive," not only to Detwiler, but to "others according to our market checks."

Of particular concern for Arnold are Pandora's forward-looking fundamentals: Within the context of streaming going global, the analyst suggests Pandora may not be up to speed and ready to compete on that front.

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"While the company was able to hide from licensing costs incurred by others behind some ancient laws designed to keep corruption off the radio, this only worked domestically. Streaming is going global, platforms are maturing, and the music industry is looking increasingly favorably upon paid for services that seem to be taking hold," Arnold elaborated.

In addition to the advances in streaming, the analyst also noted industry landscape shifts, including murmurs of acquisitions, partnerships and consolidations.

Implications

Arnold concluded that against the backdrop of this changing environment, particularly one so populated by big hitters such as Apple Inc. AAPL and Alphabet Inc GOOG GOOGL, it's possible that Pandora will soon be "dust in the wind."

"The streaming audio landscape continues to change. Apple and Spotify are ramping the paid side of the market quickly, and the music industry loves it as they see subscription services working. Furthermore, the Record industry is moving toward a windowed release methodology for new content, and music services are evolving to accommodate […] As the industry is finds [sic] its way, Pandora stands outside how things are coming together."

Arnold concluded stoically, "We're beginning to wonder if it might me [sic] too little too late."