Pandora...The Day After

Pandora Media Inc (NYSE: P) reported Q1 results Thursday with greater than expected revenue and a narrower than expected loss per share.

The stock surged Friday and recently traded at $18.40, up 3.90 percent.

Analysts weighed in on the results. Below are highlights along with current ratings and price targets.

SunTrust - Buy, $25 price target

“POSITIVES: 1Q results beat, gross profit grew 55% y/y (margin +700 bps y/y), sales hires were higher than expected, monetization and subscription outperformed. Full-year guidance was raised and our revenue/EBITDA forecasts increase by ~2%/~6% accordingly. NEGATIVES: Users/hours were 1%/2% below consensus, though slightly better than our forecast. We view this as less important, but comScore data suggested upside and thus some investors may be disappointed. NET-NET: Our thesis is entirely unchanged.”

Wedbush - Outperform, $27 price target

“We believe that Pandora has the better side of the argument in its royalty hearing, and expect the CRB to set rates closer to Pandora’s case for fair market value. The market has discounted Pandora shares in the belief that its royalty structure will increase materially for the foreseeable future; we do not share that view, and believe that should the CRB ruling be adverse, Pandora has significant leverage to negotiate favorable rates directly with the record labels.”

Morgan Stanley - Equal-weight, $18 price target

The firm saw Pandora's "shares at current valuations as tempting given (1) the potential for direct-deals with labels post the rate setting process (CRB) later this year, which have the potential to solidify the cost base / domestic business model as well as open up international opportunities and (2) the potential strategic value of Pandora's brand and mobile time spent. However, the range of cost outcomes is quite wide, and we continue to be more cautious than consensus on the ability to accelerate listener hours.”

Albert Fried & Company - Market Perform, $19 price target

“Pandora offers a great service and revenue growth potential. However, great Companies do not always offer attractive returns for equity investors. Given the upside to our $18 Target we think Pandora is a hold and fluctuations could provide entry points. We predict in the next 12 to 18 months Pandora will sign deals with Sony Music and Merlin and Launch a domestic and International streaming service with economics that allow Pandora to break even at roughly the $3 to $4 ARPU level.”

Pacific Crest - Overweight, $22 price target

“Pandora showed progress in monetization, in-car listening and artist marketing in Q1, making the negative reaction in its stock unwarranted, in our view. We recommend owning P based on its leading scale in mobile and unique ad inventory. The CRB arbitration should remain an overhang, but we continue to believe a reasonable outcome is highly likely.”

Cowen - Outperform, $23 price target

“We see two potential key catalysts for the stock: 1) Disclosure on the expanse of the local market effort, the number or salespeople and quota, which all demonstrate the potential of the local opportunity; also 2) Announcements related to the auto opportunity, which is a large opportunity likely to emerge in early '15.”

Stifel - Buy, $25 price target

“Pandora raised its full-year revenue guidance by more than its 1Q revenue beat (+10mm), but increased its adj. EBITDA guide by slightly less as some expenses were delayed rather than eliminated. We raise our 2015E revenue / adj. EBITDA to $1.17B / $82mm from $1.16B / $78mm[...]While Pandora's 1Q revenue hurdle was arguably a low bar, we see several positive catalysts for its advertising business heading into the second half of the year.”