NEW YORK (TheStreet) -- Pacific Crest said the Pandora Media (P) conference call yesterday to discuss Web IV proceedings regarding royalties with the Copyright Royalty Board (CRB) reinforces its view that "a reasonable outcome is highly likely."
"We continue to believe that the most sound economic arguments and the most comparable deals support performance royalties that are in line with or below Pandora's (P, $20.27, Outperform) current rate structure," analysts said, regarding the internet radio company.
"The company's improving monetization and stable competitive position should allow it to grow ad revenue at a greater than 30% y/y rate for at least the next two years, and we expect operating leverage to increase with scale," analysts noted.
"As long as the CRB process produces reasonable rates, which we view as highly likely, Pandora is likely to grow EPS at a 100% or greater CAGR through at least 2016, which would likely justify a stock price well above current levels," analysts added.
Shares of Pandora are down 0.49% at $20.17.
Separately, TheStreet Ratings team rates PANDORA MEDIA INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PANDORA MEDIA INC (P) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself."