What Can Produce 20% Downside For Pandora’s Stock In The Next 1-2 Years?

-2.14%
Downside
8.38
Market
8.20
Trefis
P: Pandora Media logo
P
Pandora Media

The stock of Pandora (NYSE:P) can fall ~20% next year, if its content acquisition costs increase at a faster than expected pace due to its inability to strike direct licensing deals with music publishers and rights agencies. A faster rise in content costs could lead to an expansion of 3% in EV/EBITDA multiple, but 24% decline in 2016 EBITDA. For increased expenses will likely compress valuation metrics. We present this scenario in the following tabular fashion. See the links below for additional information.

pandora 1

P stock movement 2

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Pandora 2

Have more questions about Pandora? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Pandora
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