Analyst: There's More Pain Coming For Pandora

Courtesy of Benzinga.

Pandora Media Inc (NYSE: P) shares took a major beating on Friday after the company reported disappointing fourth quarter earnings and gave a weak guidance.

Richard Greenfield from BTIG was on CNBC to dissect Pandora’s quarterly numbers. He also discussed whether it has any chances of success going forward.

“This is a company that basically doesn’t make money today or any substantial money today where competition is rising,” Greenfield said.

“Lots of [competitors]…don’t need to make money on music…whether it's Google, what they are trying to do with YouTube; whether it's Amazon with the Amazon Prime music service; whether it's Apple now with Beats.”

Competing With Giants

Greenfield explained that these peers are using music to simply boost user interaction. Pandora, on the other hand, relies on it.

Related Link: What Analysts Are Saying About Pandora

In terms of ads, it's also possible Pandora's narrow focus could be a weakness compared to competitors with more diverse offerings.

“Advertisers have this whole new playground of video options, whether it’s Facebook, Instagram, Twitter," Greenfield said, before adding: "there are so many options beyond the audio-only world of Pandora.

"I think they are in for more pain as you go forward,” he concluded.

The Flip Side

Worth noting, positive numbers from OTR Global last month pushed shares up more than 10 percent on January 23. The report, which cited advertising effectiveness, projected that 17 different ad agencies were boosting their Pandora budgets.

The stock fell 17.2 percent this past Friday. Shares are down 14 percent year-to-date.

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