Pandora Media Hits Year-Low, Analysts Trim Targets

Pandora Media Inc P extended its losses Friday on a disappointing quarterly report and outlook, while analysts cut targets.

The Internet radio company's shares hit a year low at $15.17; shares closed at $155.23, down 17.2 percent on the day.

Analysts at Raymond James and Wells Fargo reportedly downgraded Pandora from Outperform to Market Perform.

"We think the easy long money was already earned by value investors," said Albert Fried & Co.'s Rich Tullo, who nonetheless upgraded Pandora to Market Perform, from Underweight, and maintained a $16 price target.

"Investors are very disappointed" by fourth-quarter advertising sales growth of 39 percent to $220 million, said Tullo, who expected ad sales of $222 million.

Pandora said the disappointing ad revenue number resulted from an unexpected decline during the key Black Friday and Cyber Monday holiday period.

But Wedbush's Michael Pachter maintained an Outperform rating and said the key to Pandora's current selloff is a disappointing margin outlook.

The company's plan to reinvest gross profits in its future growth "limits the operating leverage the company will deliver in 2015," Pachter said. "Investors appeared disappointed with this."

Pachter cut his price target nearly 23 percent to $27, but said as listener hours grow, Pandora's revenue will increase at a faster rate.

Credit Suisse's Stephen Ju maintained a Neutral rating but sees a "silver lining" in local advertising sales which grew 90 percent to $49.9 million, from a year earlier.

But Ju cut his price target more than 12 percent to $21, and said "disruption" in Pandora's total advertising revenue will hurt its share price.