Pandora had its most profitable quarter since its IPO, but its stock is getting punished by the market following the company's Q4 earnings announcement.
Pandora's stock has been down as much by 9% ever since its earnings came out.
During Pandora's earnings call, the stock has dropped by as much as 10.69%.
That might seem somewhat strange given that Pandora reported its biggest quarter of profit since it went public in 2011, and continues to lead the market by number of listeners.
Pandora also nearly matched analyst's expectations for the quarter with revenues of $200.8 million versus $201 million, and beat analyst's expectations with an EPS of $0.11 versus $0.08.
Ok, so why exactly is the stock tanking?
Well, Pandora's guidance for this year doesn't match up with what analysts expect, and that worries stockholders. As they looked to the company's first-quarter guidance, it saw a bigger loss than expected.
For Q1, Pandora expects revenues between $170 million and $176 million, below the average $176 million estimate. Pandora expects EPS between -$0.14 to -$0.16, much worse than the average analyst estimate of a -$0.12 EPS.
For the full year, Pandora expects non-GAAP revenues in the range of $870 million to $890 million. But analysts, on average, expect revenues of $896.3 million.
On its earnings call, Pandora CEO Brian McAndrews says it's much more relevant for investors to look at its Q4 and full year revenues, as opposed to the guidance for this year.
Pandora's stock is currently down 10.69%, trading at $32.00 per share.
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