Pandora (P) is now witnessing a modest summer run-up go poof, thanks to a broader Wall Street meltdown that has music and entertainment stocks under pressure. In Monday trading, shares of Pandora slipped another 4.03 percent to $17.13, with sub-$15 valuations likely in the near-term.
Earlier this month, Pandora pushed towards the $20-mark before getting brushed back at $19.38 on August 12th. Since that point, Pandora has slipped a noticeable 11.38 percent, with the slide now heading into overdrive.
Of course, that’s now par for a very treacherous course. Few are being spared from a Chinese tsunami that is punishing global markets, while punishing paper wealth and stoking fears of a greater economic downturn. In a ‘Black Monday’ rout, China’s Shanghai composite index returned all of its 2015 gains by the close of trading, with stateside barometers like the S&P 500 handing back another 3.8 percent in a broader, multi-month correction.
In that volatility, the question is just how extra-vulnerable stocks like Pandora may be: despite substantial ‘Buy’ ratings with price targets averaging just over $20, a number of investment houses are shifting towards less complementary assessments. That includes an ‘Overweight’ by Piper Jaffray and Albert Fried & Co., and a bearishly ‘Neutral’ rating from B. Riley with an accompanying $15 price target.
The question is how Pandora’s schooner will navigate the storm, analyst optimism notwithstanding. Despite heavy surges in listening totals and continued dominance in the internet radio realm, Pandora has failed to post a profit in the past three years, with cash-burn now greater than $200 million since inception. Indeed, that soggy resume has contributed to a broader 35-plus-percent dip in 2015, with looming licensing wars with mega-publishers like Sony/ATV furthering investor anxiety.