Albert Fried: Shares Of Pandora Are 'Dead Money'

Rich Tullo of Albert Fried & Company believes that shares of Pandora Media Inc (NYSE: P) are "dead money on the long side" and that the "easy long money was already earned by value investors."

Tullo describes himself as "the biggest if not the only bear" covering Pandora. The analyst finds plenty of reasons to maintain a Market Perform rating and $20 price target (which is currently under review and may be further reduced in the near-term) following the company's third quarter results.

"Our chief concern, Monthly user growth all but ceased at 76.5 million versus 76.4 million in the prior seasonally slow quarter," Tullo wrote in a note to clients on Friday. "This quarter was even below our 78 million user estimate. We guess those Pandora Internet of things icemakers did not drive user growth."

Tullo adds that Pandora may see a rough fourth quarter as political advertising dollars will tail off in October. Additionally, local advertising dollars, which includes autos and retailers, could be weak given the growing supply of used autos and low consumer income growth. As such, the analyst doubts the company will live up to its $40 million in revenue guidance in the quarter.

Tullo concludes by suggesting investors sell into any rallies as shares are down around 55 percent from 52-week highs while the company continues to fail in growing its core metrics at a satisfactory level.

Shares recently traded at $19.51, down 15.6 percent.