We have updated our price targets and some price target ratings for companies with monthly subscriptions in the media distributor industry. We have also removed the Dish Network due to a decision to tighten the band of net debt/EBITDA levels. Below is our current valuations of these companies. Source: Perspectec Spotify Inc. (SPOT-NASDAQ) Important Disclosures and Disclaimer This publication is produced by Perspectec Inc. This publication and the contents hereof are intended for information purposes only, and may be subject to change without further notice. Any use, disclosure, distribution, dissemination, copying, printing or reliance on this publication for any […]
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With contributions from Nicholas Stiege – One of our top picks, Pandora, saw its share price rise, post an all-stock offer from SiriusXM for $10.14 a share. Including the 10.3% price drop of SiriusXM, the offer represents a takeover price of $9.19, slightly above the $8.98 September 24th closing price, but materially below what we believe Pandora’s fair market price is ($13). It appears the market does not believe another bid is coming. Chairman of both SiriusXM and Pandora Greg Maffei and his two SiriusXM board members at Pandora have voted for a deal that we do not believe is […]
Spotify continues to lead the streaming music market, splitting share in North America with its largest competitor, Apple Music. The company’s Q2 results and Q3 guidance raised our prospects on the stock slightly. More importantly, however, we have updated our valuation metrics on Spotify. Previously we had valued Spotify on only a trailing 12-month customer lifetime value basis. However, this valuation metric did not do an adequate job accounting for Spotify’s growth metrics. We now value Spotify on a combination of one year’s worth of gross margin dollars and one year’s worth of customer lifetime value added, accounting for guidance one […]
We have outlined overlooked issues on Spotify (SPOT-NYSE) in 20 easy to follow (or pitch) slides. These slides include: – Subscriber valuation graphs, correlations and tables – Tracking of Global top streams and their relationship with Premium Subscribers – How different plans, regions and promotions affect ARPU – Revenues for both the music and digital music industries – Financial forecasts on a number of metrics – Comparable metric comparison versus Pandora – Subscriber Comparable tables with Netflix, SiriusXM, Pandora and Spotify – Stock Recommendations
With the recent launch of Spotify, we have examined SPOT’s peer group including Netflix, Sirius XM and Pandora. We found a strong relationship between the Customer LifeTime Value added (CLTV added TTM) and Customer LifeTime Value (CLTV TTM) and the dilutive market capitalization of these companies. Target Price Calculation Based on the accumulated and relative data of its online media competitors, we believe Pandora is a BUY. In the potential (probable) absence of no future operating profit, we believe Pandora can be valued using a similar valuation model as Spotify. Using Netflix, SiriusXM, Spotify and Pandora, there is a strong […]