NEW YORK (TheStreet) -- Pandora Media (P) stock is up by 1.03% to $13.20 in pre-market trading on Wednesday, ahead of a decision by the Copyright Royalty Board that will determine the internet radio company's rates for the next five years.
The U.S. board is expected to make its decision after the market close on Wednesday. Pandora will hold a conference call at 4:30 ET after the decision, the company said in a statement on Tuesday.
Analysts expect a rate increase of 8% year-over-year, which would bring rates to 15 cents per 100 songs, according to JMP Securities.
A rate increase of 1 cent per 100 songs would impact Pandora's 2016 EBITDA by about $20 million, JMP Securities said in an analyst note on Wednesday.
Additionally, Pandora signed a licensing agreement on Tuesday with Warner/Chappell Music, Warner Music Group's publishing company, which caused shares to surge. The deal is part of Pandora's efforts to compete with other streaming services such as Spotify.
"Following the outcome of the rate-setting process, we believe Pandora is well positioned to negotiate direct deals with major labels to expand globally and launch an on-demand subscription service to compete with Spotify and Apple (AAPL)," JMP Securities said.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate PANDORA MEDIA INC as a Sell with a ratings score of D+. 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 and generally disappointing historical performance in the stock itself.