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Pandora Media ( P ) stock jumped on growth in listening hours among music streaming app users and a smaller-than-expected loss amid stiff competition from Apple ( AAPL ) Music and others. On Pandora’s Q1 earnings conference call late Thursday, management reported progress developing an on-demand music platform and integrating concert ticketing services into its app. “Ticketfly” revenue of $22.3 million topped analysts’ estimate of $17 million. Pandora expects to launch an on-demand service by year-end. Marketing expenses are rising as the company diversifies. “Pandora’s user base growth continues to languish (likely due to competition from Spotify and Apple Music),” said Mark Mahaney, an analyst at RBC Capital Markets, in a research report. “Pandora is undergoing a dramatic growth investment phase to protect and grow its core ad-supported music streaming business while spending $120 million to develop an on-demand music service — a tough challenge.” Dan Salmon, analyst at BMO Capital Markets, is also cautious. “Pandora believes it can generate better margins than existing on-demand offerings through ‘free’ customer acquisition from its user base, and will aim to counter the cannibalization dynamic by targeting lower monetizing users,” he wrote in a report. Pandora said that its Q1 revenue rose 29% year over year to $297 million, topping Wall Street views of $286 million in sales. The company reported a loss of 20 cents per share minus items, vs. expectations of a 31-cent per-share loss. Pandora raised its full year 2016 revenue and EBITDA (earnings before interest, taxes, depreciation and amortization) guidance each by $10 million. Pandora stock was near 10, up 6% in afternoon trading on the stock market today , near 10. With Friday’s gain, Pandora’s stock is still down 23% in 2016. Pandora has a low IBD Composite Rating of 27 out of a possible 99. The company said that total listening hours for its music streaming service rose 4%, to 5.52 billion. “We believe there is more value in Pandora’s roughly 80 million monthly active listeners than the market currently rewards shareholders,” William Blair analyst Ralph Schackart said in a research note, “while acknowledging the stalled-out user growth concern.” Scalper1 News
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