Topic: Company Analysis
Use one of the following links (or multiple sites) below to research a company that begins with
the same letter as your last name (e.g., someone with the last name Henderson could choose
Hercules Offshore, Inc.).
Google Finance (finance.google.com) - To find such a company, begin by entering letters in the
search bar. Click on the company you choose when it appears. A Summary page will appear. In
the left column, you will see a link to Financials (if you don’t see this link, choose a larger
company). Click on this link and then click on Annual Date. From the Income statement you can
detect trends in revenue, gross profit, operating income, net income, and dividends per share.
You can find other useful data on the Balance Sheet and Cash Flow statements.
Yahoo Finance (finance.yahoo.com) - Once at the site, enter your company’s ticker symbol and
click Search. Below the price of your stock, you will see links for Summary, Statistics,
Financials, and Analysts. These will provide valuable information also.
Reuters (www.reuters.com) - Once at the site, Near the top right, click on the magnifying glass
icon. The icon will move to the left side of the screen. Enter your stock’s ticker beside the icon
and then click on the icon. On the screen that appears, click on your company’s name right below
NEWS. Click on Financials. On this screen, you will see ratios for your company and for the
Industry in which your company operates. The ratios relate to Valuation, Dividends, Profitability,
etc. You can use these ratios to compare your company with the industry.
In your thread, describe the industry conditions, the financial position of the company (relative to
the industry and the company as a whole), the economic outlook of the company, and why you as
a potential investor would or would not invest in this company. In determining your answer,
please be sure to address some of the key financial indicators that helped to determine your
decision to invest or not to invest. Please note that while you are giving your opinion, you should
avoid using first person.
When replying to a classmate's threads, indicate why you believe your peer has made a good
investment decision or a bad investment decision. Also, indicate those areas, if any, which should
have been examined more thoroughly.
Pandora Media is a company that offers its consumers the capability to stream on-demand
music through personalized playlists and radio stations. The company delivers its product
through a subscription-based service. Users who subscribe to Pandora can access thousands of
songs through Pandora’s online streaming service. The company launched its services in 2005
and opened their initial public offering in 2011. Since its launch, Pandora Media has for a steady
increase in company size and revenue. Today, Pandora Media has over 1,900 full-time employees
(Yahoo Finance, n.d.). Due to the popularity of online music streaming, Pandora Media remains
relevant as one of the pioneers in the music streaming business.
Pandora Media’s most recent balance sheet shows a value of $1,166M in total assets and
$273M in long term debt. Revenue has steadily increased within the last few years, with revenue
reports showing $1,385M in 2016 and $1,467M in 2017 (Kessler, 2019). Furthermore, Kessler
(2019) projects that “revenue growth of 7% for 2018 and 11% to 12% annually for 2019 and
2020”. In September 2018, Sirius XM Holdings announced they are closing an agreement with
Pandora Media in a $3.5 billion all-stock deal, forecasting a merger that would create the world’s
largest audio entertainment company (Seitz, 2018). At the time the statement of the merger
became public, Seitz (2018) shared that “Pandora shareholders will receive 1.44 newly issued
Sirius XM shares for each Pandora share they hold”. This prediction indicates that shareholders
who have invested with Pandora before the merger will possibly gain more return on their
investment.
Pandora Media is known to be one of the pioneers in streaming music online. However,
over the last decade, Pandora has faced fierce competition from other companies such as Apple,
Google Play, and Spotify. Efforts from competition (i.e. Apple Music) to stand out include
providing a global radio station, providing the news, interviews with guests, private music
sessions from popular artists, and the ability to integrate Apple Music with existing tracks
purchased from iTunes (Risley, 2015). In order to stay relevant in the music streaming industry,
Pandora should consider other options to stand out from competitors, such as offering
competitive premium subscription options for students and/or government employees, group
pricing for families, etc.
While the merger with Sirius XM Holdings is set to be completed by March 2019, there
is still a chance the merger could be delayed or even cancelled altogether. Furthermore, Pandora
Media faces several challenges with the increase in music royalties, higher marketing costs, and
stronger competition. However, Pandora Media is still seen as a “leader in personalized radio,
despite notable competition" (Kessler, 2019). Considering all these factors, investors who are
risk adverse should avoid investing with Pandora Media. If investors are looking to obtain shares
within the online streaming industry, they should analyze stock reports from competitors of
Pandora Media before deciding where to invest.
References
Kessler, S. H. (2019, January 12). Pandora Media, Inc. S&P Global Market Intelligence.
Retrieved from https://www-capitaliq-
com.ezproxy.liberty.edu/CIQDotNet/Research/DocumentViewer.aspx?
documentViewerDocumentId=25707671
Risley, J. (2015, June 8). Apple Music vs. Spotify, Pandora and the Rest of the Streaming
Competition. Retrieved from https://www.geekwire.com/2015/chart-apple-music-vs-
spotify-pandora-rhapsody-and-the-rest-of-the-streaming-competition/
Seitz, P. (2018, September 24). Sirius XM to buy Pandora Media in $3.5 billion all-stock
deal. Investors Business Daily. Retrieved from http://ezproxy.liberty.edu/login?
url=http://search.ebscohost.com/login.aspx?
direct=true&db=bth&AN=131942745&site=ehost-live&scope=site
Yahoo Finance. (n.d.). Pandora Media. Retrieved from https://finance.yahoo.com/quote/P?
p=P&.trc=fin-src
