Financial Review: Pandora Media (P) vs. Entercom Communications Corporation (ETM)

Entercom Communications Corporation (NYSE: ETM) and Pandora Media (NYSE:P) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitabiliy, valuation, earnings, risk and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Entercom Communications Corporation and Pandora Media, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Entercom Communications Corporation 0 0 1 0 3.00
Pandora Media 1 20 15 0 2.39

Pandora Media has a consensus price target of $13.45, indicating a potential upside of 92.46%. Given Pandora Media’s higher probable upside, analysts clearly believe Pandora Media is more favorable than Entercom Communications Corporation.

Volatility & Risk

Entercom Communications Corporation has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Pandora Media has a beta of 0.07, indicating that its stock price is 93% less volatile than the S&P 500.

Earnings and Valuation

This table compares Entercom Communications Corporation and Pandora Media’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Entercom Communications Corporation $461.59 million 0.90 $101.22 million $0.56 18.21
Pandora Media $1.40 billion 1.20 -$256.51 million ($1.54) -4.54

Entercom Communications Corporation has higher revenue, but lower earnings than Pandora Media. Pandora Media is trading at a lower price-to-earnings ratio than Entercom Communications Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Entercom Communications Corporation and Pandora Media’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Entercom Communications Corporation 5.27% 8.79% 3.28%
Pandora Media -25.66% -45.15% -21.73%

Dividends

Entercom Communications Corporation pays an annual dividend of $0.30 per share and has a dividend yield of 2.9%. Pandora Media does not pay a dividend. Entercom Communications Corporation pays out 53.6% of its earnings in the form of a dividend.

Insider & Institutional Ownership

50.5% of Entercom Communications Corporation shares are owned by institutional investors. 32.6% of Entercom Communications Corporation shares are owned by insiders. Comparatively, 6.6% of Pandora Media shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Entercom Communications Corporation beats Pandora Media on 10 of the 15 factors compared between the two stocks.

About Entercom Communications Corporation

Entercom Communications Corp. is a radio broadcasting company. The Company sells advertising time to local, regional and national advertisers and national network advertisers, purchasing spot commercials in varying lengths. It focuses on station-related digital platforms, which allow for audience interaction and participation, and integrated local digital marketing solutions and station events. Its stations are classified by their format, such as news, sports, talk, classic rock, urban, adult contemporary, alternative and country, among others. As of December 31, 2016, it had a portfolio of radio stations in 28 markets across the United States. It operates in various markets, which include Boston, Buffalo, Denver, Kansas City, Miami, Sacramento, San Francisco and Seattle. Its radio stations include KSWD Frequency Modulation (FM), KOSI FM, KYGO FM, KEPN AM, KKFN FM, KQKS FM, KRWZ Amplitude Modulation (AM), WSTR FM, WAXY AM/FM, WLYF FM, WMXJ FM, KBZT FM, KSON FM/KSOQ FM and KIFM FM.

About Pandora Media

Pandora Media, Inc. (Pandora) is a music discovery platform, offering a personalized experience for each of its listeners wherever and whenever they want to listen to music, whether through earbuds, car speakers or live on stage. The Company delivers targeted messages to its listeners using a combination of audio, display and video advertisements. Its segments include Pandora-Internet Radio Service and Ticketfly. As of December 31, 2016, it provided Pandora service through two models: advertising-supported service and subscription service-Pandora Plus. Pandora is integrated with connected devices, including automobiles, automotive aftermarket devices and consumer electronic devices. Its Ticketfly service is a cloud ticketing platform for live events. It operates ticketing service through its subsidiary, Ticketfly, a live events technology company that provides ticketing and marketing software and services for its clients, which are venues and event promoters, across North America.

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