Cumulus Media (NASDAQ: CMLS) and Pandora Media (NYSE:P) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitabiliy, institutional ownership, earnings and analyst recommendations.

Valuation & Earnings

This table compares Cumulus Media and Pandora Media’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cumulus Media $1.14 billion 0.01 $202.03 million ($17.24) -0.03
Pandora Media $1.40 billion 1.51 -$256.51 million ($1.54) -5.69

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

Insider & Institutional Ownership

67.0% of Cumulus Media shares are held by institutional investors. 13.5% of Cumulus Media shares are held by company insiders. Comparatively, 2.6% of Pandora Media shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Cumulus Media and Pandora Media, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cumulus Media 0 1 0 0 2.00
Pandora Media 1 20 16 0 2.41

Pandora Media has a consensus price target of $13.17, suggesting a potential upside of 50.13%. Given Pandora Media’s stronger consensus rating and higher possible upside, analysts clearly believe Pandora Media is more favorable than Cumulus Media.

Profitability

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

Net Margins Return on Equity Return on Assets
Cumulus Media -44.30% N/A -0.45%
Pandora Media -25.66% -45.15% -21.73%

Volatility and Risk

Cumulus Media has a beta of 3.55, suggesting that its stock price is 255% more volatile than the S&P 500. Comparatively, Pandora Media has a beta of 0.07, suggesting that its stock price is 93% less volatile than the S&P 500.

Summary

Pandora Media beats Cumulus Media on 7 of the 13 factors compared between the two stocks.

Cumulus Media Company Profile

Cumulus Media Inc. (Cumulus) is a radio broadcasting company. The Company is also a provider of country music and lifestyle content through its NASH brand, which serves through radio programming, NASH Country Weekly magazine and live events. Its product lines include broadcast advertising, digital advertising, political advertising and non-advertising based license fees. Its broadcast advertising includes the sale of commercial advertising time to local, national and network clients. Its digital advertising includes the sale of advertising and promotional opportunities across its Websites and mobile applications. Its across the nation platform generates content distributable through both broadcast and digital platforms. Its categories of advertisers consist of amusement and recreation; banking and mortgage; furniture and home furnishings; arts and entertainment; food and beverage services; healthcare services; automotive dealers; food and beverage stores, and telecommunications.

Pandora Media Company Profile

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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