Investors are getting nervous about Pandora. The stock fell 24% today as several analysts cut their rating on the stock after the company forecast higher-than-expected losses.
Citigroup analyst Mark Mahaney was among them, citing “mobile monetization challenges” as costs increase faster than revenue. “As a speculative buy, with no profitability track record and no near-term profitable outlook, Pandora always carried very little margin for error – and now there’s error,” he tells clients.
Pandora’s stock lost more than a fifth of its value in after-hours trading late Tuesday as investors expressed concerns that the company’s revenue isn’t keeping up with its expense growth. Pandora reported a fourth-quarter loss that was more than twice as big as a year earlier and said its losses in its first quarter would be as much as ten-times what analysts had been expecting.