Expect Lots Of Discussion On Pandora's Purchase Of Ticketfly During Q3 Earnings Call

• The share price of Pandora Media, Inc. P has surged 44.68 percent over the last three months, reaching a high of $21.98 on October 6.
• Stifel’s John Egbert has maintained a Buy rating and price target of $30 on the company.
• Egbert expects the company to answer various questions on the Ticketfly acquisition and the impending pre-1972 recording litigation during its 3Q15 earnings call, scheduled for October 22.

Analyst John Egbert expects “continued strength in monetization alongside gradual growth in listenership to drive slight upside to consensus forecasts in 3Q.”

According to the Stifel report, the recent recovery in Pandora Media’s share price has been to a large extent due to higher investor comfort associated with the possible outcomes of Web IV, although the “looming decision” is expected to “continue to overshadow the company’s near-term results.”

For 3Q15, Egbert expects the company to report audience growth similar to that in 2Q, at the steady low to mid single digit range. Pandora Media’s total revenue is expected to grow more than 31 percent year on year during 3Q, in line with the consensus and the guidance.

Subscription revenue is expected to have increased more than 24 percent year on year, although Egbert believes that “this could prove conservative if Pandora’s one-day subscription passes are getting traction with consumers.”

During the earnings call, Egbert expects investors to focus on the Ticketfly acquisition and ask questions about “Ticketfly’s current revenue growth rate, unit economics on ticket sales, how Pandora calculates the target addressable market opportunity for this business, and what type of impact Pandora thinks it can make by integrating ticket sales into its Artist Marketing Platform.”