Which Market Offer More Value? – Pandora Media, Inc. (P), O’Reilly Automotive, Inc. (ORLY)

The shares of Pandora Media, Inc. have increased by more than 5.81% this year alone. The shares recently went up by 1.80% or $0.09 and now trades at $5.10. The shares of O’Reilly Automotive, Inc. (NASDAQ:ORLY), has slumped by -6.51% year to date as of 04/13/2018. The shares currently trade at $224.87 and have been able to report a change of -5.19% over the past one week.

The stock of Pandora Media, Inc. and O’Reilly Automotive, Inc. were two of the most active stocks on Friday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Next 5Y EPS Growth: 32.20% versus 16.86%

When a company is able to grow consistently in terms of earnings at a high compound rate have the highest likelihood of creating value for its shareholders over time. Analysts have predicted that P will grow it’s earning at a 32.20% annual rate in the next 5 years. This is in contrast to ORLY which will have a positive growth at a 16.86% annual rate. This means that the higher growth rate of P implies a greater potential for capital appreciation over the years.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. The ROI of P is -116.00% while that of ORLY is 32.20%. These figures suggest that ORLY ventures generate a higher ROI than that of P.

Cash Flow

The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, P’s free cash flow per share is a positive 0, while that of ORLY is positive 2.14.

Liquidity and Financial Risk

The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for P is 4.00 and that of ORLY is 0.90. This implies that it is easier for P to cover its immediate obligations over the next 12 months than ORLY. The debt ratio of P is 1.79 compared to 4.56 for ORLY. ORLY can be able to settle its long-term debts and thus is a lower financial risk than P.


P currently trades at a P/B of 8.36, and a P/S of 0.87 while ORLY trades at a forward P/E of 13.09, a P/B of 29.20, and a P/S of 2.13. This means that looking at the earnings, book values and sales basis, P is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.

Analyst Price Targets and Opinions

The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of P is currently at a -20.56% to its one-year price target of 6.42. Looking at its rival pricing, ORLY is at a -22.89% relative to its price target of 291.61.

When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), P is given a 2.60 while 1.90 placed for ORLY. This means that analysts are more bullish on the outlook for P stocks.

Insider Activity and Investor Sentiment

Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for P is 7.03 while that of ORLY is just 4.16. This means that analysts are more bullish on the forecast for ORLY stock.


The stock of Pandora Media, Inc. defeats that of O’Reilly Automotive, Inc. when the two are compared, with P taking 7 out of the total factors that were been considered. P happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, P is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for P is better on when it is viewed on short interest.

Previous ArticleNext Article

Related Post

Set Sail With Scorpio Tankers Inc. (STNG), Primo W... The shares of Scorpio Tankers Inc. have decreased by more than -6.56% this year alone. The shares recently went up by 1.79% or $0.05 and now trades at...
Morgan Stanley (MS) and The Goldman Sachs Group, I... Morgan Stanley (NYSE:MS) shares are up more than 14.51% this year and recently decreased -0.51% or -$0.25 to settle at $48.38. The Goldman Sachs Group...
Are These Stocks A Sure Bet? – NVIDIA Corpor... The shares of NVIDIA Corporation have increased by more than 37.94% this year alone. The shares recently went up by 1.72% or $4.51 and now trades at $...
Health Insurance Innovations (HIIQ): Signals from ... Health Insurance Innovations, Inc. (NASDAQ:HIIQ) fell by -4.78% in Wednesday’s trading session from $23.00 to $21.90. The price has been moving in bot...
Looking at the Big Picture for Cleveland-Cliffs In... Cleveland-Cliffs Inc. (NYSE:CLF) has recently been identified as an interesting stock but more in-depth monitoring is needed for a trade decision. Now...