u/Optimaltheory

The author notes Pandora is down 55% over the past year while earnings have grown for five consecutive years, leaving it at a P/E of 8.26 with a 79.7% gross profit margin. They argue the market is not valuing the margin structure, calculating that even a 40% revenue decline would leave the company profitable at roughly a 13 P/E. The author plans to start buying slowly and increase the position if the price falls further. The stated risk is that consumers in the affordable luxury segment cut spending when budgets tighten, though the last earnings report showed only a -1.57% revenue miss.