The Internet radio company posted earnings of 4 cents per share, which was lower than analysts' forecasts for earnings of 7 cents per share. However, revenue of $336.2 million beat analysts' estimates for revenue of $331.2 million.
On Thursday, shares of Pandora surged after the New York Times reported that the company is considering selling itself.
Additionally, the company announced that it is investing about $120 million in an on-demand subscription service, but Pandora's ability to acquire a subscription base without "cannibalizing" its core business is still unproven, Credit Suisse said in a note.
The firm lowered its price target on Pandora stock to $17 from $24, while maintaining its "neutral" rating on the stock.
Pandora stock is up 2.74% to $9.36 in pre-market trading on Friday.
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 rates this stock as a "sell" with a ratings score of D. 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.
You can view the full analysis from the report here: PP data by YCharts